Correlation Between Cal Maine and Above Food
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Above Food 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 Cal Maine and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cal Maine Foods and Above Food Ingredients, you can compare the effects of market volatilities on Cal Maine and Above Food 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 Cal Maine with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Above Food.
Diversification Opportunities for Cal Maine and Above Food
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cal and Above is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and Cal Maine 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 Cal Maine Foods are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of Cal Maine i.e., Cal Maine and Above Food go up and down completely randomly.
Pair Corralation between Cal Maine and Above Food
Given the investment horizon of 90 days Cal Maine Foods is expected to generate 0.15 times more return on investment than Above Food. However, Cal Maine Foods is 6.56 times less risky than Above Food. It trades about 0.19 of its potential returns per unit of risk. Above Food Ingredients is currently generating about -0.1 per unit of risk. If you would invest 6,047 in Cal Maine Foods on September 3, 2024 and sell it today you would earn a total of 3,714 from holding Cal Maine Foods or generate 61.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Cal Maine Foods vs. Above Food Ingredients
Performance |
| Timeline |
| Cal Maine Foods |
| Above Food Ingredients |
Cal Maine and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Above Food
The main advantage of trading using opposite Cal Maine and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| Cal Maine vs. Bunge Limited | Cal Maine vs. Tyson Foods | Cal Maine vs. Dole PLC | Cal Maine vs. Adecoagro SA |
| Above Food vs. Visteon Corp | Above Food vs. Valneva SE ADR | Above Food vs. Brunswick | Above Food vs. NETGEAR |
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.
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