Correlation Between CAL MAINE and TOTAL GABON
Can any of the company-specific risk be diversified away by investing in both CAL MAINE and TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON, you can compare the effects of market volatilities on CAL MAINE and TOTAL GABON 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 TOTAL GABON. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAL MAINE and TOTAL GABON.
Diversification Opportunities for CAL MAINE and TOTAL GABON
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAL and TOTAL is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and TOTAL GABON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL GABON 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 TOTAL GABON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL GABON has no effect on the direction of CAL MAINE i.e., CAL MAINE and TOTAL GABON go up and down completely randomly.
Pair Corralation between CAL MAINE and TOTAL GABON
Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 1.28 times more return on investment than TOTAL GABON. However, CAL MAINE is 1.28 times more volatile than TOTAL GABON. It trades about 0.07 of its potential returns per unit of risk. TOTAL GABON is currently generating about 0.06 per unit of risk. If you would invest 5,147 in CAL MAINE FOODS on September 12, 2024 and sell it today you would earn a total of 4,421 from holding CAL MAINE FOODS or generate 85.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAL MAINE FOODS vs. TOTAL GABON
Performance |
| Timeline |
| CAL MAINE FOODS |
| TOTAL GABON |
CAL MAINE and TOTAL GABON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAL MAINE and TOTAL GABON
The main advantage of trading using opposite CAL MAINE and TOTAL GABON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAL MAINE position performs unexpectedly, TOTAL GABON 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 TOTAL GABON will offset losses from the drop in TOTAL GABON's long position.The idea behind CAL MAINE FOODS and TOTAL GABON pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TOTAL GABON vs. TYSON FOODS A | TOTAL GABON vs. National Beverage Corp | TOTAL GABON vs. Food Life Companies | TOTAL GABON vs. SENECA FOODS A |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Correlations Find global opportunities by holding instruments from different markets |