Correlation Between Cal Maine and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Cal Maine and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Cal Maine and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Jacquet Metal.
Diversification Opportunities for Cal Maine and Jacquet Metal
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal and Jacquet is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Cal Maine i.e., Cal Maine and Jacquet Metal go up and down completely randomly.
Pair Corralation between Cal Maine and Jacquet Metal
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.23 times more return on investment than Jacquet Metal. However, Cal Maine is 1.23 times more volatile than Jacquet Metal Service. It trades about 0.09 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.02 per unit of risk. If you would invest 4,373 in Cal Maine Foods on October 16, 2024 and sell it today you would earn a total of 6,247 from holding Cal Maine Foods or generate 142.85% 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. Jacquet Metal Service
Performance |
| Timeline |
| Cal Maine Foods |
| Jacquet Metal Service |
Cal Maine and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and Jacquet Metal
The main advantage of trading using opposite Cal Maine and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Cal Maine vs. Treasury Wine Estates | Cal Maine vs. Cars Inc | Cal Maine vs. WT OFFSHORE | Cal Maine vs. Grupo Carso SAB |
| Jacquet Metal vs. Cal Maine Foods | Jacquet Metal vs. PLANT VEDA FOODS | Jacquet Metal vs. THAI BEVERAGE | Jacquet Metal vs. Austevoll Seafood ASA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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