Correlation Between Caseys General and KCE Electronics
Can any of the company-specific risk be diversified away by investing in both Caseys General and KCE Electronics 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 KCE Electronics 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 KCE Electronics Public, you can compare the effects of market volatilities on Caseys General and KCE Electronics 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 KCE Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and KCE Electronics.
Diversification Opportunities for Caseys General and KCE Electronics
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Caseys and KCE is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and KCE Electronics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCE Electronics Public 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 KCE Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCE Electronics Public has no effect on the direction of Caseys General i.e., Caseys General and KCE Electronics go up and down completely randomly.
Pair Corralation between Caseys General and KCE Electronics
Assuming the 90 days trading horizon Caseys General is expected to generate 1.88 times less return on investment than KCE Electronics. In addition to that, Caseys General is 1.24 times more volatile than KCE Electronics Public. It trades about 0.1 of its total potential returns per unit of risk. KCE Electronics Public is currently generating about 0.24 per unit of volatility. If you would invest 43.00 in KCE Electronics Public on April 25, 2025 and sell it today you would earn a total of 13.00 from holding KCE Electronics Public or generate 30.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Caseys General Stores vs. KCE Electronics Public
Performance |
Timeline |
Caseys General Stores |
KCE Electronics Public |
Caseys General and KCE Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Caseys General and KCE Electronics
The main advantage of trading using opposite Caseys General and KCE Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, KCE Electronics 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 KCE Electronics will offset losses from the drop in KCE Electronics' long position.Caseys General vs. Zijin Mining Group | Caseys General vs. DATAWALK B H ZY | Caseys General vs. Eurasia Mining Plc | Caseys General vs. ANDRADA MINING LTD |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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