Correlation Between Cal-Maine Foods and Performance Food
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and Performance Food 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 Performance Food 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 Performance Food Group, you can compare the effects of market volatilities on Cal-Maine Foods and Performance Food 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 Performance Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and Performance Food.
Diversification Opportunities for Cal-Maine Foods and Performance Food
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal-Maine and Performance is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and Performance Food go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and Performance Food
Assuming the 90 days horizon Cal Maine Foods is expected to generate 2.73 times more return on investment than Performance Food. However, Cal-Maine Foods is 2.73 times more volatile than Performance Food Group. It trades about 0.32 of its potential returns per unit of risk. Performance Food Group is currently generating about 0.3 per unit of risk. If you would invest 9,818 in Cal Maine Foods on October 22, 2024 and sell it today you would earn a total of 1,322 from holding Cal Maine Foods or generate 13.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.12% |
| Values | Daily Returns |
Cal Maine Foods vs. Performance Food Group
Performance |
| Timeline |
| Cal Maine Foods |
| Performance Food |
Cal-Maine Foods and Performance Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and Performance Food
The main advantage of trading using opposite Cal-Maine Foods and Performance Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, Performance Food 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 Performance Food will offset losses from the drop in Performance Food's long position.| Cal-Maine Foods vs. Nestl SA | Cal-Maine Foods vs. General Mills | Cal-Maine Foods vs. General Mills | Cal-Maine Foods vs. Danone SA |
| Performance Food vs. Yuexiu Transport Infrastructure | Performance Food vs. Jacquet Metal Service | Performance Food vs. AEON METALS LTD | Performance Food vs. Darden Restaurants |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |