Correlation Between Cal Maine and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Lamar Advertising 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 Lamar Advertising 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 Lamar Advertising, you can compare the effects of market volatilities on Cal Maine and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Lamar Advertising.
Diversification Opportunities for Cal Maine and Lamar Advertising
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cal and Lamar is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of Cal Maine i.e., Cal Maine and Lamar Advertising go up and down completely randomly.
Pair Corralation between Cal Maine and Lamar Advertising
If you would invest 6,638 in Cal Maine Foods on September 29, 2024 and sell it today you would earn a total of 3,086 from holding Cal Maine Foods or generate 46.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. Lamar Advertising
Performance |
| Timeline |
| Cal Maine Foods |
| Lamar Advertising |
Cal Maine and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Lamar Advertising
The main advantage of trading using opposite Cal Maine and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.The idea behind Cal Maine Foods and Lamar Advertising 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.| Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc | Lamar Advertising vs. Apple Inc |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |