Correlation Between Cal Maine and Visa
Specify exactly 2 symbols:
By analyzing existing cross correlation between Cal Maine Foods and Visa Inc, you can compare the effects of market volatilities on Cal Maine and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Visa.
Diversification Opportunities for Cal Maine and Visa
Poor diversification
The 3 months correlation between Cal and Visa is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Visa Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Inc 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Inc has no effect on the direction of Cal Maine i.e., Cal Maine and Visa go up and down completely randomly.
Pair Corralation between Cal Maine and Visa
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.0 times more return on investment than Visa. However, Cal Maine Foods is 1.0 times less risky than Visa. It trades about 0.5 of its potential returns per unit of risk. Visa Inc is currently generating about 0.36 per unit of risk. If you would invest 7,984 in Cal Maine Foods on September 5, 2024 and sell it today you would earn a total of 1,356 from holding Cal Maine Foods or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. Visa Inc
Performance |
| Timeline |
| Cal Maine Foods |
| Visa Inc |
Cal Maine and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Visa
The main advantage of trading using opposite Cal Maine and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.The idea behind Cal Maine Foods and Visa Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |