Correlation Between CAL MAINE and Medical Properties
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and Medical Properties 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 Medical Properties 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 Medical Properties Trust, you can compare the effects of market volatilities on CAL MAINE and Medical Properties 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 Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and Medical Properties.
Diversification Opportunities for CAL MAINE and Medical Properties
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAL and Medical is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust 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 Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of CAL MAINE i.e., CAL MAINE and Medical Properties go up and down completely randomly.
Pair Corralation between CAL MAINE and Medical Properties
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.38 times more return on investment than Medical Properties. However, CAL MAINE FOODS is 2.61 times less risky than Medical Properties. It trades about 0.16 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.02 per unit of risk. If you would invest 3,802 in CAL MAINE FOODS on August 29, 2024 and sell it today you would earn a total of 5,348 from holding CAL MAINE FOODS or generate 140.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. Medical Properties Trust
Performance |
| Timeline |
| CAL MAINE FOODS |
| Medical Properties Trust |
CAL MAINE and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and Medical Properties
The main advantage of trading using opposite CAL MAINE and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| CAL MAINE vs. Apple Inc | CAL MAINE vs. Apple Inc | CAL MAINE vs. Superior Plus Corp | CAL MAINE vs. SIVERS SEMICONDUCTORS AB |
| Medical Properties vs. DXC Technology Co | Medical Properties vs. Monster Beverage Corp | Medical Properties vs. NISSIN FOODS HLDGS | Medical Properties vs. Sunny Optical Technology |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |