Correlation Between CAL MAINE and Pampa Energía
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and Pampa Energía 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 Pampa Energía 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 Pampa Energa SA, you can compare the effects of market volatilities on CAL MAINE and Pampa Energía 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 Pampa Energía. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and Pampa Energía.
Diversification Opportunities for CAL MAINE and Pampa Energía
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CAL and Pampa is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and Pampa Energa SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pampa Energa SA 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 Pampa Energía. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pampa Energa SA has no effect on the direction of CAL MAINE i.e., CAL MAINE and Pampa Energía go up and down completely randomly.
Pair Corralation between CAL MAINE and Pampa Energía
Assuming the 90 days trading horizon CAL MAINE is expected to generate 1.76 times less return on investment than Pampa Energía. But when comparing it to its historical volatility, CAL MAINE FOODS is 1.47 times less risky than Pampa Energía. It trades about 0.07 of its potential returns per unit of risk. Pampa Energa SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,700 in Pampa Energa SA on August 26, 2024 and sell it today you would earn a total of 5,050 from holding Pampa Energa SA or generate 187.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. Pampa Energa SA
Performance |
| Timeline |
| CAL MAINE FOODS |
| Pampa Energa SA |
CAL MAINE and Pampa Energía Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and Pampa Energía
The main advantage of trading using opposite CAL MAINE and Pampa Energía positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, Pampa Energía 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 Pampa Energía will offset losses from the drop in Pampa Energía's long position.| CAL MAINE vs. RYU Apparel | CAL MAINE vs. DALATA HOTEL | CAL MAINE vs. G III APPAREL GROUP | CAL MAINE vs. COVIVIO HOTELS INH |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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