Correlation Between Cal-Maine Foods and National Beverage
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and National Beverage 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 Foods and National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Cal-Maine Foods and National Beverage 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 Foods with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and National Beverage.
Diversification Opportunities for Cal-Maine Foods and National Beverage
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal-Maine and National is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and Cal-Maine Foods 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and National Beverage go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and National Beverage
Assuming the 90 days horizon Cal Maine Foods is expected to generate 1.02 times more return on investment than National Beverage. However, Cal-Maine Foods is 1.02 times more volatile than National Beverage Corp. It trades about 0.23 of its potential returns per unit of risk. National Beverage Corp is currently generating about 0.19 per unit of risk. If you would invest 8,282 in Cal Maine Foods on August 29, 2024 and sell it today you would earn a total of 790.00 from holding Cal Maine Foods or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. National Beverage Corp
Performance |
| Timeline |
| Cal Maine Foods |
| National Beverage Corp |
Cal-Maine Foods and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and National Beverage
The main advantage of trading using opposite Cal-Maine Foods and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Cal-Maine Foods vs. Superior Plus Corp | Cal-Maine Foods vs. NMI Holdings | Cal-Maine Foods vs. Origin Agritech | Cal-Maine Foods vs. SIVERS SEMICONDUCTORS AB |
| National Beverage vs. CEOTRONICS | National Beverage vs. Platinum Investment Management | National Beverage vs. Perdoceo Education | National Beverage vs. ANTA SPORTS PRODUCT |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |