Correlation Between CAL MAINE and Biogen
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and Biogen 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 Biogen 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 Biogen Inc, you can compare the effects of market volatilities on CAL MAINE and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and Biogen.
Diversification Opportunities for CAL MAINE and Biogen
Pay attention - limited upside
The 3 months correlation between CAL and Biogen is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of CAL MAINE i.e., CAL MAINE and Biogen go up and down completely randomly.
Pair Corralation between CAL MAINE and Biogen
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 1.31 times more return on investment than Biogen. However, CAL MAINE is 1.31 times more volatile than Biogen Inc. It trades about 0.07 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.07 per unit of risk. If you would invest 4,842 in CAL MAINE FOODS on August 30, 2024 and sell it today you would earn a total of 4,308 from holding CAL MAINE FOODS or generate 88.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. Biogen Inc
Performance |
| Timeline |
| CAL MAINE FOODS |
| Biogen Inc |
CAL MAINE and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and Biogen
The main advantage of trading using opposite CAL MAINE and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| CAL MAINE vs. Apple Inc | CAL MAINE vs. Apple Inc | CAL MAINE vs. Superior Plus Corp | CAL MAINE vs. SIVERS SEMICONDUCTORS AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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