Correlation Between Cal Maine and OVERSEA CHINUNSPADR/2
Can any of the company-specific risk be diversified away by investing in both Cal Maine and OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR2, you can compare the effects of market volatilities on Cal Maine and OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and OVERSEA CHINUNSPADR/2.
Diversification Opportunities for Cal Maine and OVERSEA CHINUNSPADR/2
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cal and OVERSEA is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and OVERSEA CHINUNSPADR2 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OVERSEA CHINUNSPADR/2 has no effect on the direction of Cal Maine i.e., Cal Maine and OVERSEA CHINUNSPADR/2 go up and down completely randomly.
Pair Corralation between Cal Maine and OVERSEA CHINUNSPADR/2
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.83 times more return on investment than OVERSEA CHINUNSPADR/2. However, Cal Maine is 1.83 times more volatile than OVERSEA CHINUNSPADR2. It trades about 0.1 of its potential returns per unit of risk. OVERSEA CHINUNSPADR2 is currently generating about 0.08 per unit of risk. If you would invest 4,526 in Cal Maine Foods on October 20, 2024 and sell it today you would earn a total of 6,639 from holding Cal Maine Foods or generate 146.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cal Maine Foods vs. OVERSEA CHINUNSPADR2
Performance |
| Timeline |
| Cal Maine Foods |
| OVERSEA CHINUNSPADR/2 |
Cal Maine and OVERSEA CHINUNSPADR/2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and OVERSEA CHINUNSPADR/2
The main advantage of trading using opposite Cal Maine and OVERSEA CHINUNSPADR/2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, OVERSEA CHINUNSPADR/2 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 OVERSEA CHINUNSPADR/2 will offset losses from the drop in OVERSEA CHINUNSPADR/2's long position.| Cal Maine vs. Aluminum of | Cal Maine vs. Dairy Farm International | Cal Maine vs. SIERRA METALS | Cal Maine vs. Air Transport Services |
| OVERSEA CHINUNSPADR/2 vs. AOYAMA TRADING | OVERSEA CHINUNSPADR/2 vs. COFCO Joycome Foods | OVERSEA CHINUNSPADR/2 vs. United Natural Foods | OVERSEA CHINUNSPADR/2 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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