Correlation Between Superior Plus and Cal Maine
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Cal Maine Foods, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Cal Maine.
Diversification Opportunities for Superior Plus and Cal Maine
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Superior and Cal is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp 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 Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Cal Maine go up and down completely randomly.
Pair Corralation between Superior Plus and Cal Maine
Assuming the 90 days horizon Superior Plus is expected to generate 38.16 times less return on investment than Cal Maine. In addition to that, Superior Plus is 1.19 times more volatile than Cal Maine Foods. It trades about 0.01 of its total potential returns per unit of risk. Cal Maine Foods is currently generating about 0.53 per unit of volatility. If you would invest 8,496 in Cal Maine Foods on September 18, 2024 and sell it today you would earn a total of 2,184 from holding Cal Maine Foods or generate 25.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Superior Plus Corp vs. Cal Maine Foods
Performance |
| Timeline |
| Superior Plus Corp |
| Cal Maine Foods |
Superior Plus and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Cal Maine
The main advantage of trading using opposite Superior Plus and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. PT Bank Maybank | Superior Plus vs. Strategic Education | Superior Plus vs. COMINTL BANK ADR1 | Superior Plus vs. CAREER EDUCATION |
| Cal Maine vs. Superior Plus Corp | Cal Maine vs. SIVERS SEMICONDUCTORS AB | Cal Maine vs. NorAm Drilling AS | Cal Maine vs. Norsk Hydro ASA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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