Correlation Between CAL MAINE and Pernod Ricard
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and Pernod Ricard 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 Pernod Ricard 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 Pernod Ricard SA, you can compare the effects of market volatilities on CAL MAINE and Pernod Ricard 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 Pernod Ricard. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and Pernod Ricard.
Diversification Opportunities for CAL MAINE and Pernod Ricard
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAL and Pernod is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and Pernod Ricard SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pernod Ricard SA 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 Pernod Ricard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pernod Ricard SA has no effect on the direction of CAL MAINE i.e., CAL MAINE and Pernod Ricard go up and down completely randomly.
Pair Corralation between CAL MAINE and Pernod Ricard
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 1.27 times more return on investment than Pernod Ricard. However, CAL MAINE is 1.27 times more volatile than Pernod Ricard SA. It trades about 0.16 of its potential returns per unit of risk. Pernod Ricard SA is currently generating about -0.09 per unit of risk. If you would invest 4,108 in CAL MAINE FOODS on August 25, 2024 and sell it today you would earn a total of 4,980 from holding CAL MAINE FOODS or generate 121.23% 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. Pernod Ricard SA
Performance |
| Timeline |
| CAL MAINE FOODS |
| Pernod Ricard SA |
CAL MAINE and Pernod Ricard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and Pernod Ricard
The main advantage of trading using opposite CAL MAINE and Pernod Ricard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, Pernod Ricard 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 Pernod Ricard will offset losses from the drop in Pernod Ricard'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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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