Correlation Between METTLER TOLEDO and CAL MAINE
Can any of the company-specific risk be diversified away by investing in both METTLER TOLEDO 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 METTLER TOLEDO and CAL MAINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between METTLER TOLEDO INTL and CAL MAINE FOODS, you can compare the effects of market volatilities on METTLER TOLEDO 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 METTLER TOLEDO with a short position of CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of METTLER TOLEDO and CAL MAINE.
Diversification Opportunities for METTLER TOLEDO and CAL MAINE
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between METTLER and CAL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding METTLER TOLEDO INTL 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 METTLER TOLEDO 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 METTLER TOLEDO INTL 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 METTLER TOLEDO i.e., METTLER TOLEDO and CAL MAINE go up and down completely randomly.
Pair Corralation between METTLER TOLEDO and CAL MAINE
Assuming the 90 days trading horizon METTLER TOLEDO is expected to generate 3.24 times less return on investment than CAL MAINE. In addition to that, METTLER TOLEDO is 1.03 times more volatile than CAL MAINE FOODS. It trades about 0.05 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.16 per unit of volatility. If you would invest 4,108 in CAL MAINE FOODS on August 25, 2024 and sell it today you would earn a total of 4,980 from holding CAL MAINE FOODS or generate 121.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
METTLER TOLEDO INTL vs. CAL MAINE FOODS
Performance |
| Timeline |
| METTLER TOLEDO INTL |
| CAL MAINE FOODS |
METTLER TOLEDO and CAL MAINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with METTLER TOLEDO and CAL MAINE
The main advantage of trading using opposite METTLER TOLEDO and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if METTLER TOLEDO 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.| METTLER TOLEDO vs. Apple Inc | METTLER TOLEDO vs. Apple Inc | METTLER TOLEDO vs. Apple Inc | METTLER TOLEDO vs. Apple Inc |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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