Correlation Between Cal Maine and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Cal Maine and HomeToGo 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 HomeToGo 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 HomeToGo SE, you can compare the effects of market volatilities on Cal Maine and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and HomeToGo.
Diversification Opportunities for Cal Maine and HomeToGo
Pay attention - limited upside
The 3 months correlation between Cal and HomeToGo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Cal Maine i.e., Cal Maine and HomeToGo go up and down completely randomly.
Pair Corralation between Cal Maine and HomeToGo
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 0.82 times more return on investment than HomeToGo. However, Cal Maine Foods is 1.23 times less risky than HomeToGo. It trades about 0.2 of its potential returns per unit of risk. HomeToGo SE is currently generating about 0.07 per unit of risk. If you would invest 6,074 in Cal Maine Foods on November 3, 2024 and sell it today you would earn a total of 4,251 from holding Cal Maine Foods or generate 69.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. HomeToGo SE
Performance |
| Timeline |
| Cal Maine Foods |
| HomeToGo SE |
Cal Maine and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and HomeToGo
The main advantage of trading using opposite Cal Maine and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo'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 |
| HomeToGo vs. Scientific Games | HomeToGo vs. MOVIE GAMES SA | HomeToGo vs. EIDESVIK OFFSHORE NK | HomeToGo vs. WT OFFSHORE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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