Correlation Between COGNA EDUCACAO and CAL-MAINE FOODS
Can any of the company-specific risk be diversified away by investing in both COGNA EDUCACAO 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 COGNA EDUCACAO 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 COGNA EDUCACAO SPADR and CAL MAINE FOODS, you can compare the effects of market volatilities on COGNA EDUCACAO 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 COGNA EDUCACAO with a short position of CAL-MAINE FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of COGNA EDUCACAO and CAL-MAINE FOODS.
Diversification Opportunities for COGNA EDUCACAO and CAL-MAINE FOODS
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between COGNA and CAL-MAINE is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding COGNA EDUCACAO SPADR 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 COGNA EDUCACAO 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 COGNA EDUCACAO SPADR 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 COGNA EDUCACAO i.e., COGNA EDUCACAO and CAL-MAINE FOODS go up and down completely randomly.
Pair Corralation between COGNA EDUCACAO and CAL-MAINE FOODS
Assuming the 90 days trading horizon COGNA EDUCACAO SPADR is expected to under-perform the CAL-MAINE FOODS. In addition to that, COGNA EDUCACAO is 2.18 times more volatile than CAL MAINE FOODS. It trades about -0.25 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.2 per unit of volatility. If you would invest 9,976 in CAL MAINE FOODS on October 21, 2024 and sell it today you would earn a total of 834.00 from holding CAL MAINE FOODS or generate 8.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
COGNA EDUCACAO SPADR vs. CAL MAINE FOODS
Performance |
| Timeline |
| COGNA EDUCACAO SPADR |
| CAL MAINE FOODS |
COGNA EDUCACAO and CAL-MAINE FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COGNA EDUCACAO and CAL-MAINE FOODS
The main advantage of trading using opposite COGNA EDUCACAO and CAL-MAINE FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COGNA EDUCACAO 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's long position.| COGNA EDUCACAO vs. IDP EDUCATION LTD | COGNA EDUCACAO vs. TAL Education Group | COGNA EDUCACAO vs. Grand Canyon Education | COGNA EDUCACAO vs. Graham Holdings Co |
| CAL-MAINE FOODS vs. ZURICH INSURANCE GROUP | CAL-MAINE FOODS vs. Comba Telecom Systems | CAL-MAINE FOODS vs. Japan Post Insurance | CAL-MAINE FOODS vs. TELECOM ITALIA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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