Correlation Between CAL MAINE and LESLIES INC
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and LESLIES INC 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 LESLIES INC 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 LESLIES INC DL, you can compare the effects of market volatilities on CAL MAINE and LESLIES INC 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 LESLIES INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and LESLIES INC.
Diversification Opportunities for CAL MAINE and LESLIES INC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAL and LESLIES is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and LESLIES INC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LESLIES INC DL 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 LESLIES INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LESLIES INC DL has no effect on the direction of CAL MAINE i.e., CAL MAINE and LESLIES INC go up and down completely randomly.
Pair Corralation between CAL MAINE and LESLIES INC
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.28 times more return on investment than LESLIES INC. However, CAL MAINE FOODS is 3.53 times less risky than LESLIES INC. It trades about 0.25 of its potential returns per unit of risk. LESLIES INC DL is currently generating about -0.07 per unit of risk. If you would invest 5,419 in CAL MAINE FOODS on September 3, 2024 and sell it today you would earn a total of 3,721 from holding CAL MAINE FOODS or generate 68.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. LESLIES INC DL
Performance |
| Timeline |
| CAL MAINE FOODS |
| LESLIES INC DL |
CAL MAINE and LESLIES INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and LESLIES INC
The main advantage of trading using opposite CAL MAINE and LESLIES INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, LESLIES INC 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 LESLIES INC will offset losses from the drop in LESLIES INC's long position.| CAL MAINE vs. LG Display Co | CAL MAINE vs. USWE SPORTS AB | CAL MAINE vs. SINGAPORE AIRLINES | CAL MAINE vs. VIAPLAY GROUP AB |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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