Correlation Between CAL MAINE and NISSIN FOODS
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and NISSIN FOODS 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 NISSIN FOODS 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 NISSIN FOODS HLDGS, you can compare the effects of market volatilities on CAL MAINE and NISSIN FOODS 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 NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and NISSIN FOODS.
Diversification Opportunities for CAL MAINE and NISSIN FOODS
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between CAL and NISSIN is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS 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 NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of CAL MAINE i.e., CAL MAINE and NISSIN FOODS go up and down completely randomly.
Pair Corralation between CAL MAINE and NISSIN FOODS
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.56 times more return on investment than NISSIN FOODS. However, CAL MAINE FOODS is 1.78 times less risky than NISSIN FOODS. It trades about 0.44 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about 0.06 per unit of risk. If you would invest 7,936 in CAL MAINE FOODS on September 3, 2024 and sell it today you would earn a total of 1,204 from holding CAL MAINE FOODS or generate 15.17% 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. NISSIN FOODS HLDGS
Performance |
| Timeline |
| CAL MAINE FOODS |
| NISSIN FOODS HLDGS |
CAL MAINE and NISSIN FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and NISSIN FOODS
The main advantage of trading using opposite CAL MAINE and NISSIN FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, NISSIN FOODS 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 NISSIN FOODS will offset losses from the drop in NISSIN FOODS'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 |
| NISSIN FOODS vs. TOTAL GABON | NISSIN FOODS vs. Walgreens Boots Alliance | NISSIN FOODS vs. Peak Resources Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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