Correlation Between Caseys General and Wm Morrison

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Can any of the company-specific risk be diversified away by investing in both Caseys General and Wm Morrison at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Caseys General and Wm Morrison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Wm Morrison Supermarkets, you can compare the effects of market volatilities on Caseys General and Wm Morrison and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Caseys General with a short position of Wm Morrison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Wm Morrison.

Diversification Opportunities for Caseys General and Wm Morrison

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Caseys and MRWSY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Wm Morrison Supermarkets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wm Morrison Supermarkets and Caseys General is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Caseys General Stores are associated (or correlated) with Wm Morrison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wm Morrison Supermarkets has no effect on the direction of Caseys General i.e., Caseys General and Wm Morrison go up and down completely randomly.

Pair Corralation between Caseys General and Wm Morrison

If you would invest  30,092  in Caseys General Stores on December 29, 2023 and sell it today you would earn a total of  1,777  from holding Caseys General Stores or generate 5.91% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Caseys General Stores  vs.  Wm Morrison Supermarkets

 Performance 
       Timeline  
Caseys General Stores 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish basic indicators, Caseys General showed solid returns over the last few months and may actually be approaching a breakup point.
Wm Morrison Supermarkets 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Wm Morrison Supermarkets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Wm Morrison is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Caseys General and Wm Morrison Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Caseys General and Wm Morrison

The main advantage of trading using opposite Caseys General and Wm Morrison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Wm Morrison can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Wm Morrison will offset losses from the drop in Wm Morrison's long position.
The idea behind Caseys General Stores and Wm Morrison Supermarkets pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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