Correlation Between Carmat SA and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both Carmat SA and CAL MAINE 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 Carmat SA and CAL MAINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carmat SA and CAL MAINE FOODS, you can compare the effects of market volatilities on Carmat SA and CAL MAINE 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 Carmat SA with a short position of CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carmat SA and CAL MAINE.
Diversification Opportunities for Carmat SA and CAL MAINE
Pay attention - limited upside
The 3 months correlation between Carmat and CAL is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Carmat SA and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE FOODS and Carmat SA 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 Carmat SA are associated (or correlated) with CAL MAINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of Carmat SA i.e., Carmat SA and CAL MAINE go up and down completely randomly.
Pair Corralation between Carmat SA and CAL MAINE
Assuming the 90 days horizon Carmat SA is expected to under-perform the CAL MAINE. In addition to that, Carmat SA is 2.17 times more volatile than CAL MAINE FOODS. It trades about -0.3 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.33 per unit of volatility. If you would invest 8,028 in CAL MAINE FOODS on August 25, 2024 and sell it today you would earn a total of 1,060 from holding CAL MAINE FOODS or generate 13.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Carmat SA vs. CAL MAINE FOODS
Performance |
| Timeline |
| Carmat SA |
| CAL MAINE FOODS |
Carmat SA and CAL MAINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carmat SA and CAL MAINE
The main advantage of trading using opposite Carmat SA and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carmat SA position performs unexpectedly, CAL MAINE 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 CAL MAINE will offset losses from the drop in CAL MAINE's long position.| Carmat SA vs. MI Homes | Carmat SA vs. ELMOS SEMICONDUCTOR | Carmat SA vs. Autohome ADR | Carmat SA vs. UNIVERSAL MUSIC GROUP |
| CAL MAINE vs. RYU Apparel | CAL MAINE vs. DALATA HOTEL | CAL MAINE vs. G III APPAREL GROUP | CAL MAINE vs. COVIVIO HOTELS INH |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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