Correlation Between Cal Maine and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Cal Maine and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on Cal Maine and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and WIMFARM SA.
Diversification Opportunities for Cal Maine and WIMFARM SA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cal and WIMFARM is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Cal Maine i.e., Cal Maine and WIMFARM SA go up and down completely randomly.
Pair Corralation between Cal Maine and WIMFARM SA
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 0.58 times more return on investment than WIMFARM SA. However, Cal Maine Foods is 1.73 times less risky than WIMFARM SA. It trades about 0.26 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about 0.03 per unit of risk. If you would invest 6,306 in Cal Maine Foods on October 18, 2024 and sell it today you would earn a total of 4,309 from holding Cal Maine Foods or generate 68.33% 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. WIMFARM SA EO
Performance |
| Timeline |
| Cal Maine Foods |
| WIMFARM SA EO |
Cal Maine and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and WIMFARM SA
The main advantage of trading using opposite Cal Maine and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Cal Maine vs. Taiwan Semiconductor Manufacturing | Cal Maine vs. ALERION CLEANPOWER | Cal Maine vs. Ultra Clean Holdings | Cal Maine vs. ELMOS SEMICONDUCTOR |
| WIMFARM SA vs. InPlay Oil Corp | WIMFARM SA vs. AUSNUTRIA DAIRY | WIMFARM SA vs. Cal Maine Foods | WIMFARM SA vs. TRAVEL LEISURE DL 01 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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