Correlation Between Cal Maine and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Cal Maine and COFCO Joycome 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 and COFCO Joycome 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 COFCO Joycome Foods, you can compare the effects of market volatilities on Cal Maine and COFCO Joycome 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 with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and COFCO Joycome.
Diversification Opportunities for Cal Maine and COFCO Joycome
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cal and COFCO is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Cal Maine 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 COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Cal Maine i.e., Cal Maine and COFCO Joycome go up and down completely randomly.
Pair Corralation between Cal Maine and COFCO Joycome
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 0.9 times more return on investment than COFCO Joycome. However, Cal Maine Foods is 1.11 times less risky than COFCO Joycome. It trades about 0.25 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.03 per unit of risk. If you would invest 8,518 in Cal Maine Foods on October 19, 2024 and sell it today you would earn a total of 2,647 from holding Cal Maine Foods or generate 31.08% 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. COFCO Joycome Foods
Performance |
| Timeline |
| Cal Maine Foods |
| COFCO Joycome Foods |
Cal Maine and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and COFCO Joycome
The main advantage of trading using opposite Cal Maine and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Cal Maine vs. Aluminum of | Cal Maine vs. Dairy Farm International | Cal Maine vs. SIERRA METALS | Cal Maine vs. Air Transport Services |
| COFCO Joycome vs. Sun Life Financial | COFCO Joycome vs. REVO INSURANCE SPA | COFCO Joycome vs. SINGAPORE AIRLINES | COFCO Joycome vs. International Consolidated Airlines |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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