Correlation Between CAL MAINE and Bayer Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and Bayer Aktiengesellscha 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 Bayer Aktiengesellscha 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 Bayer Aktiengesellschaft, you can compare the effects of market volatilities on CAL MAINE and Bayer Aktiengesellscha 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 Bayer Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and Bayer Aktiengesellscha.
Diversification Opportunities for CAL MAINE and Bayer Aktiengesellscha
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAL and Bayer is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and Bayer Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer Aktiengesellschaft 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 Bayer Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer Aktiengesellschaft has no effect on the direction of CAL MAINE i.e., CAL MAINE and Bayer Aktiengesellscha go up and down completely randomly.
Pair Corralation between CAL MAINE and Bayer Aktiengesellscha
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.62 times more return on investment than Bayer Aktiengesellscha. However, CAL MAINE FOODS is 1.61 times less risky than Bayer Aktiengesellscha. It trades about 0.07 of its potential returns per unit of risk. Bayer Aktiengesellschaft is currently generating about -0.04 per unit of risk. If you would invest 4,886 in CAL MAINE FOODS on August 25, 2024 and sell it today you would earn a total of 4,202 from holding CAL MAINE FOODS or generate 86.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. Bayer Aktiengesellschaft
Performance |
| Timeline |
| CAL MAINE FOODS |
| Bayer Aktiengesellschaft |
CAL MAINE and Bayer Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and Bayer Aktiengesellscha
The main advantage of trading using opposite CAL MAINE and Bayer Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, Bayer Aktiengesellscha 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 Bayer Aktiengesellscha will offset losses from the drop in Bayer Aktiengesellscha'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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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