Correlation Between Cal-Maine Foods and Biogen
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and Biogen 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 Biogen 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 Biogen Inc, you can compare the effects of market volatilities on Cal-Maine Foods and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and Biogen.
Diversification Opportunities for Cal-Maine Foods and Biogen
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cal-Maine and Biogen is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and Biogen go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and Biogen
Assuming the 90 days horizon Cal Maine Foods is expected to generate 0.76 times more return on investment than Biogen. However, Cal Maine Foods is 1.32 times less risky than Biogen. It trades about 0.46 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.04 per unit of risk. If you would invest 7,916 in Cal Maine Foods on September 4, 2024 and sell it today you would earn a total of 1,424 from holding Cal Maine Foods or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Cal Maine Foods vs. Biogen Inc
Performance |
| Timeline |
| Cal Maine Foods |
| Biogen Inc |
Cal-Maine Foods and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and Biogen
The main advantage of trading using opposite Cal-Maine Foods and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| Cal-Maine Foods vs. NXP Semiconductors NV | Cal-Maine Foods vs. Taylor Morrison Home | Cal-Maine Foods vs. Magnachip Semiconductor | Cal-Maine Foods vs. Taiwan Semiconductor Manufacturing |
| Biogen vs. Zijin Mining Group | Biogen vs. GALENA MINING LTD | Biogen vs. Western Copper and | Biogen vs. Harmony Gold Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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