Correlation Between Cal Maine and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Cal Maine and MOLSON COORS 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 MOLSON COORS 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 MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Cal Maine and MOLSON COORS 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 MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and MOLSON COORS.
Diversification Opportunities for Cal Maine and MOLSON COORS
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal and MOLSON is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON COORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of Cal Maine i.e., Cal Maine and MOLSON COORS go up and down completely randomly.
Pair Corralation between Cal Maine and MOLSON COORS
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.49 times more return on investment than MOLSON COORS. However, Cal Maine is 1.49 times more volatile than MOLSON RS BEVERAGE. It trades about 0.33 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.46 per unit of risk. If you would invest 8,220 in Cal Maine Foods on August 27, 2024 and sell it today you would earn a total of 958.00 from holding Cal Maine Foods or generate 11.65% 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. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Cal Maine Foods |
| MOLSON RS BEVERAGE |
Cal Maine and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and MOLSON COORS
The main advantage of trading using opposite Cal Maine and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, MOLSON COORS 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 MOLSON COORS will offset losses from the drop in MOLSON COORS's long position.| Cal Maine vs. SEKISUI CHEMICAL | Cal Maine vs. Quaker Chemical | Cal Maine vs. Boiron SA | Cal Maine vs. SBM OFFSHORE |
| MOLSON COORS vs. LEGACY IRON ORE | MOLSON COORS vs. CosmoSteel Holdings Limited | MOLSON COORS vs. United States Steel | MOLSON COORS vs. ALGOMA STEEL GROUP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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