Correlation Between EURODRY and Cal Maine
Can any of the company-specific risk be diversified away by investing in both EURODRY and Cal Maine 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 EURODRY and Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EURODRY LTD DL and Cal Maine Foods, you can compare the effects of market volatilities on EURODRY and Cal Maine 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 EURODRY with a short position of Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of EURODRY and Cal Maine.
Diversification Opportunities for EURODRY and Cal Maine
Excellent diversification
The 3 months correlation between EURODRY and Cal is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding EURODRY LTD DL and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods and EURODRY 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 EURODRY LTD DL are associated (or correlated) with Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of EURODRY i.e., EURODRY and Cal Maine go up and down completely randomly.
Pair Corralation between EURODRY and Cal Maine
Assuming the 90 days horizon EURODRY LTD DL is expected to under-perform the Cal Maine. In addition to that, EURODRY is 2.12 times more volatile than Cal Maine Foods. It trades about -0.2 of its total potential returns per unit of risk. Cal Maine Foods is currently generating about 0.29 per unit of volatility. If you would invest 8,158 in Cal Maine Foods on August 30, 2024 and sell it today you would earn a total of 972.00 from holding Cal Maine Foods or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EURODRY LTD DL vs. Cal Maine Foods
Performance |
| Timeline |
| EURODRY LTD DL |
| Cal Maine Foods |
EURODRY and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EURODRY and Cal Maine
The main advantage of trading using opposite EURODRY and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EURODRY position performs unexpectedly, Cal Maine 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 Cal Maine will offset losses from the drop in Cal Maine's long position.| EURODRY vs. SEALED AIR | EURODRY vs. Ryanair Holdings plc | EURODRY vs. National Bank Holdings | EURODRY vs. Pentair plc |
| Cal Maine vs. PROSIEBENSAT1 MEDIADR4 | Cal Maine vs. Prosiebensat 1 Media | Cal Maine vs. Beijing Media | Cal Maine vs. Seven West Media |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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