Correlation Between Cal-Maine Foods and MONEYSUPERMARKET
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and MONEYSUPERMARKET 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 MONEYSUPERMARKET 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 MONEYSUPERMARKET, you can compare the effects of market volatilities on Cal-Maine Foods and MONEYSUPERMARKET 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 MONEYSUPERMARKET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and MONEYSUPERMARKET.
Diversification Opportunities for Cal-Maine Foods and MONEYSUPERMARKET
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cal-Maine and MONEYSUPERMARKET is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and MONEYSUPERMARKET in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONEYSUPERMARKET 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 MONEYSUPERMARKET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONEYSUPERMARKET has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and MONEYSUPERMARKET go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and MONEYSUPERMARKET
Assuming the 90 days horizon Cal Maine Foods is expected to generate 1.2 times more return on investment than MONEYSUPERMARKET. However, Cal-Maine Foods is 1.2 times more volatile than MONEYSUPERMARKET. It trades about 0.06 of its potential returns per unit of risk. MONEYSUPERMARKET is currently generating about 0.02 per unit of risk. If you would invest 4,885 in Cal Maine Foods on August 25, 2024 and sell it today you would earn a total of 4,017 from holding Cal Maine Foods or generate 82.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Cal Maine Foods vs. MONEYSUPERMARKET
Performance |
| Timeline |
| Cal Maine Foods |
| MONEYSUPERMARKET |
Cal-Maine Foods and MONEYSUPERMARKET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and MONEYSUPERMARKET
The main advantage of trading using opposite Cal-Maine Foods and MONEYSUPERMARKET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, MONEYSUPERMARKET 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 MONEYSUPERMARKET will offset losses from the drop in MONEYSUPERMARKET'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 |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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