Correlation Between Cal Maine and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both Cal Maine and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE, you can compare the effects of market volatilities on Cal Maine and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and MUTUIONLINE.
Diversification Opportunities for Cal Maine and MUTUIONLINE
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cal and MUTUIONLINE is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of Cal Maine i.e., Cal Maine and MUTUIONLINE go up and down completely randomly.
Pair Corralation between Cal Maine and MUTUIONLINE
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.05 times more return on investment than MUTUIONLINE. However, Cal Maine is 1.05 times more volatile than MUTUIONLINE. It trades about 0.15 of its potential returns per unit of risk. MUTUIONLINE is currently generating about 0.06 per unit of risk. If you would invest 4,070 in Cal Maine Foods on October 25, 2024 and sell it today you would earn a total of 6,655 from holding Cal Maine Foods or generate 163.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. MUTUIONLINE
Performance |
| Timeline |
| Cal Maine Foods |
| MUTUIONLINE |
Cal Maine and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and MUTUIONLINE
The main advantage of trading using opposite Cal Maine and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| Cal Maine vs. Mobilezone Holding AG | Cal Maine vs. FIH MOBILE | Cal Maine vs. Singapore Telecommunications Limited | Cal Maine vs. Calibre Mining Corp |
| MUTUIONLINE vs. Nomad Foods | MUTUIONLINE vs. United Natural Foods | MUTUIONLINE vs. Magnachip Semiconductor | MUTUIONLINE vs. Cal Maine Foods |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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