Correlation Between Metro and Caseys General
Can any of the company-specific risk be diversified away by investing in both Metro and Caseys General 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 Metro and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Inc and Caseys General Stores, you can compare the effects of market volatilities on Metro and Caseys General 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 Metro with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro and Caseys General.
Diversification Opportunities for Metro and Caseys General
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Metro and Caseys is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Metro Inc and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores and Metro 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 Metro Inc are associated (or correlated) with Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Metro i.e., Metro and Caseys General go up and down completely randomly.
Pair Corralation between Metro and Caseys General
Assuming the 90 days horizon Metro Inc is expected to under-perform the Caseys General. But the pink sheet apears to be less risky and, when comparing its historical volatility, Metro Inc is 1.18 times less risky than Caseys General. The pink sheet trades about -0.38 of its potential returns per unit of risk. The Caseys General Stores is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 31,515 in Caseys General Stores on January 20, 2024 and sell it today you would lose (575.00) from holding Caseys General Stores or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metro Inc vs. Caseys General Stores
Performance |
| Timeline |
| Metro Inc |
| Caseys General Stores |
Metro and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro and Caseys General
The main advantage of trading using opposite Metro and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| Metro vs. Mannatech Incorporated | Metro vs. Edgewell Personal Care | Metro vs. Inter Parfums | Metro vs. Nu Skin Enterprises |
| Caseys General vs. LesliesInc | Caseys General vs. Sally Beauty Holdings | Caseys General vs. ODP Corp | Caseys General vs. 1 800 FLOWERSCOM |
Check out your portfolio center.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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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