Correlation Between Cal-Maine Foods and Atrium Ljungberg
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and Atrium Ljungberg 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 Atrium Ljungberg 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 Atrium Ljungberg AB, you can compare the effects of market volatilities on Cal-Maine Foods and Atrium Ljungberg 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 Atrium Ljungberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and Atrium Ljungberg.
Diversification Opportunities for Cal-Maine Foods and Atrium Ljungberg
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cal-Maine and Atrium is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Atrium Ljungberg AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Ljungberg 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 Atrium Ljungberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Ljungberg has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and Atrium Ljungberg go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and Atrium Ljungberg
Assuming the 90 days horizon Cal Maine Foods is expected to generate 0.94 times more return on investment than Atrium Ljungberg. However, Cal Maine Foods is 1.06 times less risky than Atrium Ljungberg. It trades about 0.4 of its potential returns per unit of risk. Atrium Ljungberg AB is currently generating about -0.1 per unit of risk. If you would invest 7,916 in Cal Maine Foods on September 5, 2024 and sell it today you would earn a total of 1,296 from holding Cal Maine Foods or generate 16.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. Atrium Ljungberg AB
Performance |
| Timeline |
| Cal Maine Foods |
| Atrium Ljungberg |
Cal-Maine Foods and Atrium Ljungberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and Atrium Ljungberg
The main advantage of trading using opposite Cal-Maine Foods and Atrium Ljungberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, Atrium Ljungberg 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 Atrium Ljungberg will offset losses from the drop in Atrium Ljungberg's long position.| Cal-Maine Foods vs. Science Applications International | Cal-Maine Foods vs. Fidelity National Information | Cal-Maine Foods vs. Information Services International Dentsu | Cal-Maine Foods vs. EBRO FOODS |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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