Correlation Between Cal Maine and TTM Technologies
Can any of the company-specific risk be diversified away by investing in both Cal Maine and TTM Technologies 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 TTM Technologies 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 TTM Technologies, you can compare the effects of market volatilities on Cal Maine and TTM Technologies 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 TTM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and TTM Technologies.
Diversification Opportunities for Cal Maine and TTM Technologies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal and TTM is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and TTM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTM Technologies 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 TTM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTM Technologies has no effect on the direction of Cal Maine i.e., Cal Maine and TTM Technologies go up and down completely randomly.
Pair Corralation between Cal Maine and TTM Technologies
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 0.86 times more return on investment than TTM Technologies. However, Cal Maine Foods is 1.17 times less risky than TTM Technologies. It trades about 0.36 of its potential returns per unit of risk. TTM Technologies is currently generating about 0.24 per unit of risk. If you would invest 6,154 in Cal Maine Foods on September 12, 2024 and sell it today you would earn a total of 3,756 from holding Cal Maine Foods or generate 61.03% 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. TTM Technologies
Performance |
| Timeline |
| Cal Maine Foods |
| TTM Technologies |
Cal Maine and TTM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and TTM Technologies
The main advantage of trading using opposite Cal Maine and TTM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, TTM Technologies 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 TTM Technologies will offset losses from the drop in TTM Technologies' long position.| Cal Maine vs. STRAYER EDUCATION | Cal Maine vs. EEDUCATION ALBERT AB | Cal Maine vs. SANOK RUBBER ZY | Cal Maine vs. Laureate Education |
| TTM Technologies vs. Tsingtao Brewery | TTM Technologies vs. Corsair Gaming | TTM Technologies vs. Suntory Beverage Food | TTM Technologies vs. The Boston Beer |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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