Correlation Between Cal Maine and Golden Agri
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Golden Agri 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 Golden Agri 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 Golden Agri Resources, you can compare the effects of market volatilities on Cal Maine and Golden Agri 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 Golden Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Golden Agri.
Diversification Opportunities for Cal Maine and Golden Agri
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cal and Golden is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Golden Agri Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Agri Resources 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 Golden Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Agri Resources has no effect on the direction of Cal Maine i.e., Cal Maine and Golden Agri go up and down completely randomly.
Pair Corralation between Cal Maine and Golden Agri
Given the investment horizon of 90 days Cal Maine Foods is expected to generate 0.37 times more return on investment than Golden Agri. However, Cal Maine Foods is 2.68 times less risky than Golden Agri. It trades about 0.12 of its potential returns per unit of risk. Golden Agri Resources is currently generating about 0.03 per unit of risk. If you would invest 4,585 in Cal Maine Foods on August 29, 2024 and sell it today you would earn a total of 5,077 from holding Cal Maine Foods or generate 110.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 55.98% |
| Values | Daily Returns |
Cal Maine Foods vs. Golden Agri Resources
Performance |
| Timeline |
| Cal Maine Foods |
| Golden Agri Resources |
Cal Maine and Golden Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Golden Agri
The main advantage of trading using opposite Cal Maine and Golden Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Golden Agri 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 Golden Agri will offset losses from the drop in Golden Agri's long position.| Cal Maine vs. Bunge Limited | Cal Maine vs. Tyson Foods | Cal Maine vs. Dole PLC | Cal Maine vs. Adecoagro SA |
| Golden Agri vs. Avi Ltd ADR | Golden Agri vs. Altavoz Entertainment | Golden Agri vs. Aryzta AG PK | Golden Agri vs. Artisan Consumer Goods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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