Correlation Between Cal Maine and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Cal Maine and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on Cal Maine and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and USWE SPORTS.
Diversification Opportunities for Cal Maine and USWE SPORTS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal and USWE is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Cal Maine i.e., Cal Maine and USWE SPORTS go up and down completely randomly.
Pair Corralation between Cal Maine and USWE SPORTS
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 0.69 times more return on investment than USWE SPORTS. However, Cal Maine Foods is 1.44 times less risky than USWE SPORTS. It trades about 0.19 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.0 per unit of risk. If you would invest 5,141 in Cal Maine Foods on November 3, 2024 and sell it today you would earn a total of 5,184 from holding Cal Maine Foods or generate 100.84% 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. USWE SPORTS AB
Performance |
| Timeline |
| Cal Maine Foods |
| USWE SPORTS AB |
Cal Maine and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and USWE SPORTS
The main advantage of trading using opposite Cal Maine and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Cal Maine vs. Elmos Semiconductor SE | Cal Maine vs. LG Display Co | Cal Maine vs. Tower Semiconductor | Cal Maine vs. ePlay Digital |
| USWE SPORTS vs. BROADSTNET LEADL 00025 | USWE SPORTS vs. Singapore Reinsurance | USWE SPORTS vs. BII Railway Transportation | USWE SPORTS vs. Nishi Nippon Railroad Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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