Correlation Between Cal Maine and Wilmar International
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Wilmar International 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 Wilmar International 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 Wilmar International, you can compare the effects of market volatilities on Cal Maine and Wilmar International 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 Wilmar International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Wilmar International.
Diversification Opportunities for Cal Maine and Wilmar International
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cal and Wilmar is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Wilmar International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmar International 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 Wilmar International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmar International has no effect on the direction of Cal Maine i.e., Cal Maine and Wilmar International go up and down completely randomly.
Pair Corralation between Cal Maine and Wilmar International
Given the investment horizon of 90 days Cal Maine Foods is expected to generate 0.95 times more return on investment than Wilmar International. However, Cal Maine Foods is 1.05 times less risky than Wilmar International. It trades about 0.19 of its potential returns per unit of risk. Wilmar International is currently generating about 0.0 per unit of risk. If you would invest 5,326 in Cal Maine Foods on August 28, 2024 and sell it today you would earn a total of 4,323 from holding Cal Maine Foods or generate 81.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Cal Maine Foods vs. Wilmar International
Performance |
| Timeline |
| Cal Maine Foods |
| Wilmar International |
Cal Maine and Wilmar International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Wilmar International
The main advantage of trading using opposite Cal Maine and Wilmar International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Wilmar International 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 Wilmar International will offset losses from the drop in Wilmar International's long position.| Cal Maine vs. Bunge Limited | Cal Maine vs. Tyson Foods | Cal Maine vs. Dole PLC | Cal Maine vs. Adecoagro SA |
| Wilmar International vs. Wilmar International Limited | Wilmar International vs. Wesfarmers Ltd ADR | Wilmar International vs. United Overseas Bank | Wilmar International vs. Kerry Group PLC |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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