Correlation Between Canadian Utilities and Caseys General

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

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

Diversification Opportunities for Canadian Utilities and Caseys General

-0.25

Correlation Coefficient

Canadian Utilities  Caseys General

Very good diversification

The 3 months correlation between Canadian and Caseys is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities i.e., Canadian Utilities and Caseys General go up and down completely randomly.

Pair Corralation between Canadian Utilities and Caseys General

Assuming the 90 days horizon Canadian Utilities is expected to generate 20.15 times less return on investment than Caseys General. But when comparing it to its historical volatility, Canadian Utilities Limited is 2.66 times less risky than Caseys General. It trades about 0.01 of its potential returns per unit of risk. Caseys General Stores is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  39,757  in Caseys General Stores on May 21, 2025 and sell it today you would earn a total of  3,843  from holding Caseys General Stores or generate 9.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Canadian Utilities Limited  vs.  Caseys General Stores

Canadian Utilities

Risk-Adjusted Performance

Weakest

Over the last 90 days Canadian Utilities Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Canadian Utilities is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Caseys General Stores

Risk-Adjusted Performance

Mild

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 fragile basic indicators, Caseys General may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Canadian Utilities and Caseys General

The main advantage of trading using opposite Canadian Utilities and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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 Canadian Utilities 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.