Correlation Between Xtrackers LevDAX and Cal-Maine Foods
Can any of the company-specific risk be diversified away by investing in both Xtrackers LevDAX and Cal-Maine Foods 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 Xtrackers LevDAX and Cal-Maine Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers LevDAX and Cal Maine Foods, you can compare the effects of market volatilities on Xtrackers LevDAX and Cal-Maine Foods 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 Xtrackers LevDAX with a short position of Cal-Maine Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers LevDAX and Cal-Maine Foods.
Diversification Opportunities for Xtrackers LevDAX and Cal-Maine Foods
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and Cal-Maine is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers LevDAX 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 Xtrackers LevDAX 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 Xtrackers LevDAX are associated (or correlated) with Cal-Maine Foods. 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 Xtrackers LevDAX i.e., Xtrackers LevDAX and Cal-Maine Foods go up and down completely randomly.
Pair Corralation between Xtrackers LevDAX and Cal-Maine Foods
Assuming the 90 days trading horizon Xtrackers LevDAX is expected to under-perform the Cal-Maine Foods. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers LevDAX is 1.1 times less risky than Cal-Maine Foods. The etf trades about -0.14 of its potential returns per unit of risk. The Cal Maine Foods is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 8,282 in Cal Maine Foods on August 29, 2024 and sell it today you would earn a total of 790.00 from holding Cal Maine Foods or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers LevDAX vs. Cal Maine Foods
Performance |
| Timeline |
| Xtrackers LevDAX |
| Cal Maine Foods |
Xtrackers LevDAX and Cal-Maine Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers LevDAX and Cal-Maine Foods
The main advantage of trading using opposite Xtrackers LevDAX and Cal-Maine Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers LevDAX position performs unexpectedly, Cal-Maine Foods 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 Foods will offset losses from the drop in Cal-Maine Foods' long position.| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
| Cal-Maine Foods vs. Superior Plus Corp | Cal-Maine Foods vs. NMI Holdings | Cal-Maine Foods vs. Origin Agritech | Cal-Maine Foods vs. SIVERS SEMICONDUCTORS AB |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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