Correlation Between Cal Maine and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both Cal Maine and GFL ENVIRONM 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 GFL ENVIRONM 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 GFL ENVIRONM, you can compare the effects of market volatilities on Cal Maine and GFL ENVIRONM 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 GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and GFL ENVIRONM.
Diversification Opportunities for Cal Maine and GFL ENVIRONM
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cal and GFL is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of Cal Maine i.e., Cal Maine and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between Cal Maine and GFL ENVIRONM
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.21 times more return on investment than GFL ENVIRONM. However, Cal Maine is 1.21 times more volatile than GFL ENVIRONM. It trades about 0.22 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.19 per unit of risk. If you would invest 8,301 in Cal Maine Foods on September 21, 2024 and sell it today you would earn a total of 1,779 from holding Cal Maine Foods or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. GFL ENVIRONM
Performance |
| Timeline |
| Cal Maine Foods |
| GFL ENVIRONM |
Cal Maine and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and GFL ENVIRONM
The main advantage of trading using opposite Cal Maine and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| Cal Maine vs. WisdomTree Investments | Cal Maine vs. Lion One Metals | Cal Maine vs. DISTRICT METALS | Cal Maine vs. Gladstone Investment |
| GFL ENVIRONM vs. Veolia Environnement SA | GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB | GFL ENVIRONM vs. NorAm Drilling AS |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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