Correlation Between SALTX TECHNOLOGY and Cal Maine
Can any of the company-specific risk be diversified away by investing in both SALTX TECHNOLOGY 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 SALTX TECHNOLOGY and Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SALTX TECHNOLOGY HLDG and Cal Maine Foods, you can compare the effects of market volatilities on SALTX TECHNOLOGY 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 SALTX TECHNOLOGY with a short position of Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALTX TECHNOLOGY and Cal Maine.
Diversification Opportunities for SALTX TECHNOLOGY and Cal Maine
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SALTX and Cal is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding SALTX TECHNOLOGY HLDG 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 SALTX TECHNOLOGY 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 SALTX TECHNOLOGY HLDG 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 SALTX TECHNOLOGY i.e., SALTX TECHNOLOGY and Cal Maine go up and down completely randomly.
Pair Corralation between SALTX TECHNOLOGY and Cal Maine
Assuming the 90 days horizon SALTX TECHNOLOGY HLDG is expected to generate 1.2 times more return on investment than Cal Maine. However, SALTX TECHNOLOGY is 1.2 times more volatile than Cal Maine Foods. It trades about 0.12 of its potential returns per unit of risk. Cal Maine Foods is currently generating about 0.04 per unit of risk. If you would invest 29.00 in SALTX TECHNOLOGY HLDG on October 14, 2024 and sell it today you would earn a total of 2.00 from holding SALTX TECHNOLOGY HLDG or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALTX TECHNOLOGY HLDG vs. Cal Maine Foods
Performance |
| Timeline |
| SALTX TECHNOLOGY HLDG |
| Cal Maine Foods |
SALTX TECHNOLOGY and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALTX TECHNOLOGY and Cal Maine
The main advantage of trading using opposite SALTX TECHNOLOGY and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALTX TECHNOLOGY 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.| SALTX TECHNOLOGY vs. Nomad Foods | SALTX TECHNOLOGY vs. AM EAGLE OUTFITTERS | SALTX TECHNOLOGY vs. RYU Apparel | SALTX TECHNOLOGY vs. TYSON FOODS A |
| Cal Maine vs. Chunghwa Telecom Co | Cal Maine vs. Singapore Telecommunications Limited | Cal Maine vs. Perseus Mining Limited | Cal Maine vs. MAG SILVER |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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