Correlation Between Cal-Maine Foods and Public Storage
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Cal-Maine Foods and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and Public Storage.
Diversification Opportunities for Cal-Maine Foods and Public Storage
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cal-Maine and Public is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and Public Storage go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and Public Storage
Assuming the 90 days horizon Cal Maine Foods is expected to generate 1.64 times more return on investment than Public Storage. However, Cal-Maine Foods is 1.64 times more volatile than Public Storage. It trades about 0.25 of its potential returns per unit of risk. Public Storage is currently generating about 0.1 per unit of risk. If you would invest 6,368 in Cal Maine Foods on August 31, 2024 and sell it today you would earn a total of 2,760 from holding Cal Maine Foods or generate 43.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. Public Storage
Performance |
| Timeline |
| Cal Maine Foods |
| Public Storage |
Cal-Maine Foods and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and Public Storage
The main advantage of trading using opposite Cal-Maine Foods and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Cal-Maine Foods vs. PICKN PAY STORES | Cal-Maine Foods vs. GungHo Online Entertainment | Cal-Maine Foods vs. SPARTAN STORES | Cal-Maine Foods vs. GALENA MINING LTD |
| Public Storage vs. Games Workshop Group | Public Storage vs. DALATA HOTEL | Public Storage vs. ANGLER GAMING PLC | Public Storage vs. Penn National Gaming |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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