Correlation Between Cal-Maine Foods and ScanSource
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and ScanSource 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 ScanSource 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 ScanSource, you can compare the effects of market volatilities on Cal-Maine Foods and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and ScanSource.
Diversification Opportunities for Cal-Maine Foods and ScanSource
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cal-Maine and ScanSource is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and ScanSource go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and ScanSource
Assuming the 90 days horizon Cal-Maine Foods is expected to generate 1.37 times less return on investment than ScanSource. But when comparing it to its historical volatility, Cal Maine Foods is 1.88 times less risky than ScanSource. It trades about 0.32 of its potential returns per unit of risk. ScanSource is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,040 in ScanSource on September 1, 2024 and sell it today you would earn a total of 700.00 from holding ScanSource or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. ScanSource
Performance |
| Timeline |
| Cal Maine Foods |
| ScanSource |
Cal-Maine Foods and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and ScanSource
The main advantage of trading using opposite Cal-Maine Foods and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Cal-Maine Foods vs. Gamma Communications plc | Cal-Maine Foods vs. Cogent Communications Holdings | Cal-Maine Foods vs. Entravision Communications | Cal-Maine Foods vs. Highlight Communications AG |
| ScanSource vs. EAGLE MATERIALS | ScanSource vs. Martin Marietta Materials | ScanSource vs. Magnachip Semiconductor | ScanSource vs. Mitsubishi Materials |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |