Correlation Between Science Applications and Cal-Maine Foods
Can any of the company-specific risk be diversified away by investing in both Science Applications and Cal-Maine Foods 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 Science Applications and Cal-Maine Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science Applications International and Cal Maine Foods, you can compare the effects of market volatilities on Science Applications and Cal-Maine Foods 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 Science Applications with a short position of Cal-Maine Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science Applications and Cal-Maine Foods.
Diversification Opportunities for Science Applications and Cal-Maine Foods
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Science and Cal-Maine is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Science Applications Internati 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 Science Applications 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 Science Applications International are associated (or correlated) with Cal-Maine Foods. 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 Science Applications i.e., Science Applications and Cal-Maine Foods go up and down completely randomly.
Pair Corralation between Science Applications and Cal-Maine Foods
Assuming the 90 days trading horizon Science Applications International is expected to under-perform the Cal-Maine Foods. But the stock apears to be less risky and, when comparing its historical volatility, Science Applications International is 1.12 times less risky than Cal-Maine Foods. The stock trades about -0.07 of its potential returns per unit of risk. The Cal Maine Foods is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 6,125 in Cal Maine Foods on December 4, 2024 and sell it today you would earn a total of 2,501 from holding Cal Maine Foods or generate 40.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Science Applications Internati vs. Cal Maine Foods
Performance |
| Timeline |
| Science Applications |
| Cal Maine Foods |
Science Applications and Cal-Maine Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science Applications and Cal-Maine Foods
The main advantage of trading using opposite Science Applications and Cal-Maine Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science Applications position performs unexpectedly, Cal-Maine Foods 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 Foods will offset losses from the drop in Cal-Maine Foods' long position.| Science Applications vs. Collins Foods Limited | Science Applications vs. TELECOM ITALRISP ADR10 | Science Applications vs. Casio Computer CoLtd | Science Applications vs. PATTIES FOODS |
| Cal-Maine Foods vs. Waste Management | Cal-Maine Foods vs. NTT DATA | Cal-Maine Foods vs. Alliance Data Systems | Cal-Maine Foods vs. Q2M Managementberatung AG |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |