Correlation Between Cal-Maine Foods and Acadia Realty
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and Acadia Realty 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 Acadia Realty 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 Acadia Realty Trust, you can compare the effects of market volatilities on Cal-Maine Foods and Acadia Realty 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 Acadia Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and Acadia Realty.
Diversification Opportunities for Cal-Maine Foods and Acadia Realty
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cal-Maine and Acadia is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust 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 Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and Acadia Realty go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and Acadia Realty
Assuming the 90 days horizon Cal Maine Foods is expected to generate 1.62 times more return on investment than Acadia Realty. However, Cal-Maine Foods is 1.62 times more volatile than Acadia Realty Trust. It trades about 0.2 of its potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.27 per unit of risk. If you would invest 5,507 in Cal Maine Foods on September 1, 2024 and sell it today you would earn a total of 3,621 from holding Cal Maine Foods or generate 65.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. Acadia Realty Trust
Performance |
| Timeline |
| Cal Maine Foods |
| Acadia Realty Trust |
Cal-Maine Foods and Acadia Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal-Maine Foods and Acadia Realty
The main advantage of trading using opposite Cal-Maine Foods and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty'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 |
| Acadia Realty vs. Dairy Farm International | Acadia Realty vs. Beyond Meat | Acadia Realty vs. Astral Foods Limited | Acadia Realty vs. INDOFOOD AGRI RES |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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