Correlation Between Caseys General and Sunstone Hotel

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

Diversification Opportunities for Caseys General and Sunstone Hotel

0.03

Correlation Coefficient

Caseys General  Sunstone Hotel

Significant diversification

The 3 months correlation between Caseys and Sunstone is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Sunstone Hotel Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunstone Hotel Investors 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 Sunstone Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunstone Hotel Investors has no effect on the direction of Caseys General i.e., Caseys General and Sunstone Hotel go up and down completely randomly.

Pair Corralation between Caseys General and Sunstone Hotel

Assuming the 90 days trading horizon Caseys General is expected to generate 1.21 times less return on investment than Sunstone Hotel. In addition to that, Caseys General is 1.06 times more volatile than Sunstone Hotel Investors. It trades about 0.06 of its total potential returns per unit of risk. Sunstone Hotel Investors is currently generating about 0.07 per unit of volatility. If you would invest  698.00  in Sunstone Hotel Investors on April 23, 2025 and sell it today you would earn a total of  62.00  from holding Sunstone Hotel Investors or generate 8.88% return on investment over 90 days.

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

Caseys General Stores  vs.  Sunstone Hotel Investors

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.

Sunstone Hotel Investors

Risk-Adjusted Performance

Modest

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

Pair Trading with Caseys General and Sunstone Hotel

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

The idea behind Caseys General Stores and Sunstone Hotel Investors 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.