Correlation Between Cal Maine and Dole PLC
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Dole PLC 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 Dole PLC 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 Dole PLC, you can compare the effects of market volatilities on Cal Maine and Dole PLC 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 Dole PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Dole PLC.
Diversification Opportunities for Cal Maine and Dole PLC
Very good diversification
The 3 months correlation between Cal and Dole is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Dole PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dole PLC 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 Dole PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dole PLC has no effect on the direction of Cal Maine i.e., Cal Maine and Dole PLC go up and down completely randomly.
Pair Corralation between Cal Maine and Dole PLC
Given the investment horizon of 90 days Cal Maine Foods is expected to generate 1.2 times more return on investment than Dole PLC. However, Cal Maine is 1.2 times more volatile than Dole PLC. It trades about 0.07 of its potential returns per unit of risk. Dole PLC is currently generating about 0.06 per unit of risk. If you would invest 5,216 in Cal Maine Foods on August 27, 2024 and sell it today you would earn a total of 4,380 from holding Cal Maine Foods or generate 83.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. Dole PLC
Performance |
| Timeline |
| Cal Maine Foods |
| Dole PLC |
Cal Maine and Dole PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Dole PLC
The main advantage of trading using opposite Cal Maine and Dole PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Dole PLC 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 Dole PLC will offset losses from the drop in Dole PLC's long position.| Cal Maine vs. Bunge Limited | Cal Maine vs. Tyson Foods | Cal Maine vs. Dole PLC | Cal Maine vs. Adecoagro SA |
| Dole PLC vs. Bellring Brands LLC | Dole PLC vs. Ingredion Incorporated | Dole PLC vs. Nomad Foods | Dole PLC vs. Post Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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