Correlation Between FUYO GENERAL and Cal Maine
Can any of the company-specific risk be diversified away by investing in both FUYO GENERAL 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 FUYO GENERAL and Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUYO GENERAL LEASE and Cal Maine Foods, you can compare the effects of market volatilities on FUYO GENERAL 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 FUYO GENERAL with a short position of Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUYO GENERAL and Cal Maine.
Diversification Opportunities for FUYO GENERAL and Cal Maine
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FUYO and Cal is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding FUYO GENERAL LEASE 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 FUYO GENERAL 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 FUYO GENERAL LEASE 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 FUYO GENERAL i.e., FUYO GENERAL and Cal Maine go up and down completely randomly.
Pair Corralation between FUYO GENERAL and Cal Maine
Assuming the 90 days horizon FUYO GENERAL is expected to generate 3.28 times less return on investment than Cal Maine. But when comparing it to its historical volatility, FUYO GENERAL LEASE is 1.67 times less risky than Cal Maine. It trades about 0.11 of its potential returns per unit of risk. Cal Maine Foods is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 8,301 in Cal Maine Foods on September 21, 2024 and sell it today you would earn a total of 1,779 from holding Cal Maine Foods or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUYO GENERAL LEASE vs. Cal Maine Foods
Performance |
| Timeline |
| FUYO GENERAL LEASE |
| Cal Maine Foods |
FUYO GENERAL and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUYO GENERAL and Cal Maine
The main advantage of trading using opposite FUYO GENERAL and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUYO GENERAL 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.| FUYO GENERAL vs. Air Transport Services | FUYO GENERAL vs. EVS Broadcast Equipment | FUYO GENERAL vs. GFL ENVIRONM | FUYO GENERAL vs. Broadcom |
| Cal Maine vs. WisdomTree Investments | Cal Maine vs. Lion One Metals | Cal Maine vs. DISTRICT METALS | Cal Maine vs. Gladstone Investment |
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 Stocks Directory module to find actively traded stocks across global markets.
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