Correlation Between Apple and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and CAL MAINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and CAL MAINE FOODS, you can compare the effects of market volatilities on Apple 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 Apple with a short position of CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and CAL MAINE.
Diversification Opportunities for Apple and CAL MAINE
Very poor diversification
The 3 months correlation between Apple and CAL is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and CAL MAINE go up and down completely randomly.
Pair Corralation between Apple and CAL MAINE
Assuming the 90 days trading horizon Apple is expected to generate 2.37 times less return on investment than CAL MAINE. But when comparing it to its historical volatility, Apple Inc is 1.29 times less risky than CAL MAINE. It trades about 0.09 of its potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 4,108 in CAL MAINE FOODS on August 25, 2024 and sell it today you would earn a total of 4,980 from holding CAL MAINE FOODS or generate 121.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. CAL MAINE FOODS
Performance |
| Timeline |
| Apple Inc |
| CAL MAINE FOODS |
Apple and CAL MAINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and CAL MAINE
The main advantage of trading using opposite Apple and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Perdoceo Education | Apple vs. UNITED UTILITIES GR | Apple vs. Federal Agricultural Mortgage | Apple vs. North American Construction |
| CAL MAINE vs. RYU Apparel | CAL MAINE vs. DALATA HOTEL | CAL MAINE vs. G III APPAREL GROUP | CAL MAINE vs. COVIVIO HOTELS INH |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |