Correlation Between China Foods and Caseys General

Can any of the company-specific risk be diversified away by investing in both China Foods 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 China Foods and Caseys General into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between China Foods Limited and Caseys General Stores, you can compare the effects of market volatilities on China Foods 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 China Foods with a short position of Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Foods and Caseys General.

Diversification Opportunities for China Foods and Caseys General

0.06

Correlation Coefficient

China Foods  Caseys General

Significant diversification

The 3 months correlation between China and Caseys is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding China Foods Limited 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 China Foods 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 China Foods Limited 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 China Foods i.e., China Foods and Caseys General go up and down completely randomly.

Pair Corralation between China Foods and Caseys General

Assuming the 90 days horizon China Foods is expected to generate 1.84 times less return on investment than Caseys General. In addition to that, China Foods is 1.53 times more volatile than Caseys General Stores. It trades about 0.03 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.09 per unit of volatility. If you would invest  38,558  in Caseys General Stores on April 20, 2025 and sell it today you would earn a total of  4,842  from holding Caseys General Stores or generate 12.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

China Foods Limited  vs.  Caseys General Stores

China Foods Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Foods Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Foods may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Caseys General Stores

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Foods and Caseys General

The main advantage of trading using opposite China Foods and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Foods 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.

The idea behind China Foods Limited and Caseys General 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.