Correlation Between Caseys General and Collins Foods

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

Diversification Opportunities for Caseys General and Collins Foods

0.34

Correlation Coefficient

Caseys General  Collins Foods

Weak diversification

The 3 months correlation between Caseys and Collins is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Collins Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods Limited 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods Limited has no effect on the direction of Caseys General i.e., Caseys General and Collins Foods go up and down completely randomly.

Pair Corralation between Caseys General and Collins Foods

Assuming the 90 days trading horizon Caseys General is expected to generate 1.46 times less return on investment than Collins Foods. But when comparing it to its historical volatility, Caseys General Stores is 1.19 times less risky than Collins Foods. It trades about 0.06 of its potential returns per unit of risk. Collins Foods Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  446.00  in Collins Foods Limited on April 23, 2025 and sell it today you would earn a total of  46.00  from holding Collins Foods Limited or generate 10.31% return on investment over 90 days.

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

Caseys General Stores  vs.  Collins Foods Limited

Caseys General Stores

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Collins Foods may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Caseys General and Collins Foods

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

The idea behind Caseys General Stores and Collins Foods Limited 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.