Correlation Between Caseys General and QKL Stores

Can any of the company-specific risk be diversified away by investing in both Caseys General and QKL Stores 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 QKL Stores 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 QKL Stores, you can compare the effects of market volatilities on Caseys General and QKL Stores 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 QKL Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and QKL Stores.

Diversification Opportunities for Caseys General and QKL Stores

0.0

Correlation Coefficient

Caseys General  QKL Stores

Pay attention - limited upside

The 3 months correlation between Caseys and QKL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and QKL Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QKL Stores 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 QKL Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QKL Stores has no effect on the direction of Caseys General i.e., Caseys General and QKL Stores go up and down completely randomly.

Pair Corralation between Caseys General and QKL Stores

If you would invest  0.01  in QKL Stores on January 25, 2024 and sell it today you would earn a total of  0.00  from holding QKL Stores or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Caseys General Stores  vs.  QKL Stores

Caseys General Stores

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in May 2024.

QKL Stores

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QKL Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, QKL Stores is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Caseys General and QKL Stores

The main advantage of trading using opposite Caseys General and QKL Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, QKL Stores 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 QKL Stores will offset losses from the drop in QKL Stores' long position.

The idea behind Caseys General Stores and QKL Stores 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.