Correlation Between MTY Food and Cal-Maine Foods
Can any of the company-specific risk be diversified away by investing in both MTY Food 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 MTY Food 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 MTY Food Group and Cal Maine Foods, you can compare the effects of market volatilities on MTY Food 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 MTY Food with a short position of Cal-Maine Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Cal-Maine Foods.
Diversification Opportunities for MTY Food and Cal-Maine Foods
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MTY and Cal-Maine is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group 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 MTY Food 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 MTY Food Group 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 MTY Food i.e., MTY Food and Cal-Maine Foods go up and down completely randomly.
Pair Corralation between MTY Food and Cal-Maine Foods
Assuming the 90 days horizon MTY Food Group is expected to generate 0.8 times more return on investment than Cal-Maine Foods. However, MTY Food Group is 1.25 times less risky than Cal-Maine Foods. It trades about 0.26 of its potential returns per unit of risk. Cal Maine Foods is currently generating about 0.18 per unit of risk. If you would invest 3,090 in MTY Food Group on November 3, 2024 and sell it today you would earn a total of 390.00 from holding MTY Food Group or generate 12.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MTY Food Group vs. Cal Maine Foods
Performance |
| Timeline |
| MTY Food Group |
| Cal Maine Foods |
MTY Food and Cal-Maine Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and Cal-Maine Foods
The main advantage of trading using opposite MTY Food and Cal-Maine Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food 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.| MTY Food vs. MPH Health Care | MTY Food vs. WESANA HEALTH HOLD | MTY Food vs. Penta Ocean Construction Co | MTY Food vs. Australian Agricultural |
| Cal-Maine Foods vs. LOANDEPOT INC A | Cal-Maine Foods vs. WILLIS LEASE FIN | Cal-Maine Foods vs. EEDUCATION ALBERT AB | Cal-Maine Foods vs. FUYO GENERAL LEASE |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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