Correlation Between Cal Maine and G III
Can any of the company-specific risk be diversified away by investing in both Cal Maine and G III 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 G III 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 G III APPAREL GROUP, you can compare the effects of market volatilities on Cal Maine and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and G III.
Diversification Opportunities for Cal Maine and G III
Poor diversification
The 3 months correlation between Cal and GI4 is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and G III APPAREL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III APPAREL 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III APPAREL has no effect on the direction of Cal Maine i.e., Cal Maine and G III go up and down completely randomly.
Pair Corralation between Cal Maine and G III
Assuming the 90 days horizon Cal Maine Foods is expected to generate 0.66 times more return on investment than G III. However, Cal Maine Foods is 1.51 times less risky than G III. It trades about 0.53 of its potential returns per unit of risk. G III APPAREL GROUP is currently generating about 0.23 per unit of risk. If you would invest 8,496 in Cal Maine Foods on September 18, 2024 and sell it today you would earn a total of 2,184 from holding Cal Maine Foods or generate 25.71% 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. G III APPAREL GROUP
Performance |
| Timeline |
| Cal Maine Foods |
| G III APPAREL |
Cal Maine and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and G III
The main advantage of trading using opposite Cal Maine and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| Cal Maine vs. Superior Plus Corp | Cal Maine vs. SIVERS SEMICONDUCTORS AB | Cal Maine vs. NorAm Drilling AS | Cal Maine vs. Norsk Hydro ASA |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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