Correlation Between CAL-MAINE FOODS and China Development
Can any of the company-specific risk be diversified away by investing in both CAL-MAINE FOODS and China Development 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 FOODS and China Development 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 China Development Bank, you can compare the effects of market volatilities on CAL-MAINE FOODS and China Development 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 FOODS with a short position of China Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL-MAINE FOODS and China Development.
Diversification Opportunities for CAL-MAINE FOODS and China Development
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAL-MAINE and China is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and China Development Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Development Bank and CAL-MAINE FOODS 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 China Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Development Bank has no effect on the direction of CAL-MAINE FOODS i.e., CAL-MAINE FOODS and China Development go up and down completely randomly.
Pair Corralation between CAL-MAINE FOODS and China Development
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.48 times more return on investment than China Development. However, CAL MAINE FOODS is 2.08 times less risky than China Development. It trades about 0.27 of its potential returns per unit of risk. China Development Bank is currently generating about -0.01 per unit of risk. If you would invest 8,028 in CAL MAINE FOODS on October 24, 2024 and sell it today you would earn a total of 2,892 from holding CAL MAINE FOODS or generate 36.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. China Development Bank
Performance |
| Timeline |
| CAL MAINE FOODS |
| China Development Bank |
CAL-MAINE FOODS and China Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL-MAINE FOODS and China Development
The main advantage of trading using opposite CAL-MAINE FOODS and China Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL-MAINE FOODS position performs unexpectedly, China Development 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 China Development will offset losses from the drop in China Development's long position.| CAL-MAINE FOODS vs. China Development Bank | CAL-MAINE FOODS vs. AUTOHOME INC A | CAL-MAINE FOODS vs. WILLIS LEASE FIN | CAL-MAINE FOODS vs. KENEDIX OFFICE INV |
| China Development vs. Apple Inc | China Development vs. Apple Inc | China Development vs. Apple Inc | China Development vs. Apple Inc |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |