Correlation Between Air Transport and CAL-MAINE FOODS
Can any of the company-specific risk be diversified away by investing in both Air Transport 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 Air Transport 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 Air Transport Services and CAL MAINE FOODS, you can compare the effects of market volatilities on Air Transport 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 Air Transport with a short position of CAL-MAINE FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Transport and CAL-MAINE FOODS.
Diversification Opportunities for Air Transport and CAL-MAINE FOODS
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Air and CAL-MAINE is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Air Transport Services 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 Air Transport 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 Air Transport Services 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 Air Transport i.e., Air Transport and CAL-MAINE FOODS go up and down completely randomly.
Pair Corralation between Air Transport and CAL-MAINE FOODS
Assuming the 90 days horizon Air Transport Services is expected to generate 3.31 times more return on investment than CAL-MAINE FOODS. However, Air Transport is 3.31 times more volatile than CAL MAINE FOODS. It trades about 0.26 of its potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.35 per unit of risk. If you would invest 1,580 in Air Transport Services on September 1, 2024 and sell it today you would earn a total of 500.00 from holding Air Transport Services or generate 31.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Transport Services vs. CAL MAINE FOODS
Performance |
| Timeline |
| Air Transport Services |
| CAL MAINE FOODS |
Air Transport and CAL-MAINE FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Transport and CAL-MAINE FOODS
The main advantage of trading using opposite Air Transport and CAL-MAINE FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Transport 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's long position.| Air Transport vs. Digilife Technologies Limited | Air Transport vs. COMBA TELECOM SYST | Air Transport vs. Singapore Telecommunications Limited | Air Transport vs. Chunghwa Telecom Co |
| CAL-MAINE FOODS vs. Gold Road Resources | CAL-MAINE FOODS vs. Transportadora de Gas | CAL-MAINE FOODS vs. GOLD ROAD RES | CAL-MAINE FOODS vs. Air Transport Services |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |