Correlation Between Cal Maine and Mowi ASA
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Mowi ASA 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 Mowi ASA 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 Mowi ASA ADR, you can compare the effects of market volatilities on Cal Maine and Mowi ASA 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 Mowi ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Mowi ASA.
Diversification Opportunities for Cal Maine and Mowi ASA
Poor diversification
The 3 months correlation between Cal and Mowi is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Mowi ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mowi ASA ADR 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 Mowi ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mowi ASA ADR has no effect on the direction of Cal Maine i.e., Cal Maine and Mowi ASA go up and down completely randomly.
Pair Corralation between Cal Maine and Mowi ASA
Given the investment horizon of 90 days Cal Maine is expected to generate 2.12 times less return on investment than Mowi ASA. In addition to that, Cal Maine is 1.15 times more volatile than Mowi ASA ADR. It trades about 0.07 of its total potential returns per unit of risk. Mowi ASA ADR is currently generating about 0.18 per unit of volatility. If you would invest 1,548 in Mowi ASA ADR on August 24, 2024 and sell it today you would earn a total of 213.00 from holding Mowi ASA ADR or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 9.07% |
| Values | Daily Returns |
Cal Maine Foods vs. Mowi ASA ADR
Performance |
| Timeline |
| Cal Maine Foods |
| Mowi ASA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cal Maine and Mowi ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Mowi ASA
The main advantage of trading using opposite Cal Maine and Mowi ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Mowi ASA 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 Mowi ASA will offset losses from the drop in Mowi ASA's long position.| Cal Maine vs. Bunge Limited | Cal Maine vs. Tyson Foods | Cal Maine vs. Dole PLC | Cal Maine vs. Adecoagro SA |
| Mowi ASA vs. Compagnie Generale des | Mowi ASA vs. Adecco Group | Mowi ASA vs. Sandvik AB ADR | Mowi ASA vs. Central Japan Railway |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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