Correlation Between CAL MAINE and PLAYMATES TOYS
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and PLAYMATES TOYS 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 PLAYMATES TOYS 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 PLAYMATES TOYS, you can compare the effects of market volatilities on CAL MAINE and PLAYMATES TOYS 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 PLAYMATES TOYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and PLAYMATES TOYS.
Diversification Opportunities for CAL MAINE and PLAYMATES TOYS
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAL and PLAYMATES is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and PLAYMATES TOYS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAYMATES TOYS 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 PLAYMATES TOYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAYMATES TOYS has no effect on the direction of CAL MAINE i.e., CAL MAINE and PLAYMATES TOYS go up and down completely randomly.
Pair Corralation between CAL MAINE and PLAYMATES TOYS
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.57 times more return on investment than PLAYMATES TOYS. However, CAL MAINE FOODS is 1.76 times less risky than PLAYMATES TOYS. It trades about 0.07 of its potential returns per unit of risk. PLAYMATES TOYS is currently generating about -0.01 per unit of risk. If you would invest 9,850 in CAL MAINE FOODS on November 8, 2024 and sell it today you would earn a total of 370.00 from holding CAL MAINE FOODS or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CAL MAINE FOODS vs. PLAYMATES TOYS
Performance |
| Timeline |
| CAL MAINE FOODS |
| PLAYMATES TOYS |
CAL MAINE and PLAYMATES TOYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and PLAYMATES TOYS
The main advantage of trading using opposite CAL MAINE and PLAYMATES TOYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, PLAYMATES TOYS 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 PLAYMATES TOYS will offset losses from the drop in PLAYMATES TOYS's long position.| CAL MAINE vs. SENECA FOODS A | CAL MAINE vs. Ebro Foods SA | CAL MAINE vs. Haier Smart Home | CAL MAINE vs. MTY Food Group |
| PLAYMATES TOYS vs. Sumitomo Mitsui Construction | PLAYMATES TOYS vs. AEON METALS LTD | PLAYMATES TOYS vs. ADRIATIC METALS LS 013355 | PLAYMATES TOYS vs. Titan Machinery |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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