Correlation Between Essentra Plc and Cal Maine
Can any of the company-specific risk be diversified away by investing in both Essentra Plc 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 Essentra Plc and Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Essentra plc and Cal Maine Foods, you can compare the effects of market volatilities on Essentra Plc 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 Essentra Plc with a short position of Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essentra Plc and Cal Maine.
Diversification Opportunities for Essentra Plc and Cal Maine
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Essentra and Cal is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Essentra plc 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 Essentra Plc 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 Essentra plc 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 Essentra Plc i.e., Essentra Plc and Cal Maine go up and down completely randomly.
Pair Corralation between Essentra Plc and Cal Maine
Assuming the 90 days horizon Essentra plc is expected to under-perform the Cal Maine. In addition to that, Essentra Plc is 1.08 times more volatile than Cal Maine Foods. It trades about -0.02 of its total potential returns per unit of risk. Cal Maine Foods is currently generating about 0.29 per unit of volatility. If you would invest 6,141 in Cal Maine Foods on September 12, 2024 and sell it today you would earn a total of 3,189 from holding Cal Maine Foods or generate 51.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essentra plc vs. Cal Maine Foods
Performance |
| Timeline |
| Essentra plc |
| Cal Maine Foods |
Essentra Plc and Cal Maine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essentra Plc and Cal Maine
The main advantage of trading using opposite Essentra Plc and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essentra Plc 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.| Essentra Plc vs. HOCHSCHILD MINING | Essentra Plc vs. Direct Line Insurance | Essentra Plc vs. Japan Post Insurance | Essentra Plc vs. Boyd Gaming |
| Cal Maine vs. Magnachip Semiconductor | Cal Maine vs. CARSALESCOM | Cal Maine vs. SINGAPORE AIRLINES | Cal Maine vs. NXP Semiconductors NV |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |