Correlation Between Caseys General and BURLINGTON STORES

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

Diversification Opportunities for Caseys General and BURLINGTON STORES

-0.18

Correlation Coefficient

Caseys General  BURLINGTON STORES

Good diversification

The 3 months correlation between Caseys and BURLINGTON is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON 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 BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of Caseys General i.e., Caseys General and BURLINGTON STORES go up and down completely randomly.

Pair Corralation between Caseys General and BURLINGTON STORES

Assuming the 90 days trading horizon Caseys General is expected to generate 2.06 times less return on investment than BURLINGTON STORES. In addition to that, Caseys General is 1.02 times more volatile than BURLINGTON STORES. It trades about 0.06 of its total potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.12 per unit of volatility. If you would invest  19,200  in BURLINGTON STORES on April 23, 2025 and sell it today you would earn a total of  3,200  from holding BURLINGTON STORES or generate 16.67% return on investment over 90 days.

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

Caseys General Stores  vs.  BURLINGTON STORES

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.

BURLINGTON STORES

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BURLINGTON STORES are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, BURLINGTON STORES exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Caseys General and BURLINGTON STORES

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

The idea behind Caseys General Stores and BURLINGTON 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.