Correlation Between Cal Maine and X FAB
Can any of the company-specific risk be diversified away by investing in both Cal Maine and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on Cal Maine and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and X FAB.
Diversification Opportunities for Cal Maine and X FAB
Very weak diversification
The 3 months correlation between Cal and XFB is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Cal Maine i.e., Cal Maine and X FAB go up and down completely randomly.
Pair Corralation between Cal Maine and X FAB
Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.33 times more return on investment than X FAB. However, Cal Maine is 1.33 times more volatile than X FAB Silicon Foundries. It trades about 0.14 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.0 per unit of risk. If you would invest 9,596 in Cal Maine Foods on October 30, 2024 and sell it today you would earn a total of 779.00 from holding Cal Maine Foods or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Cal Maine Foods vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Cal Maine Foods |
| X FAB Silicon |
Cal Maine and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cal Maine and X FAB
The main advantage of trading using opposite Cal Maine and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Cal Maine vs. GameStop Corp | Cal Maine vs. QINGCI GAMES INC | Cal Maine vs. CONTAGIOUS GAMING INC | Cal Maine vs. betterU Education Corp |
| X FAB vs. Zijin Mining Group | X FAB vs. COLUMBIA SPORTSWEAR | X FAB vs. Gaztransport Technigaz SA | X FAB vs. De Grey Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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