Correlation Between Performance Food and Cal-Maine Foods
Can any of the company-specific risk be diversified away by investing in both Performance Food 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 Performance Food 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 Performance Food Group and Cal Maine Foods, you can compare the effects of market volatilities on Performance Food 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 Performance Food with a short position of Cal-Maine Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Food and Cal-Maine Foods.
Diversification Opportunities for Performance Food and Cal-Maine Foods
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Performance and Cal-Maine is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Performance Food Group 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 Performance Food 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 Performance Food Group 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 Performance Food i.e., Performance Food and Cal-Maine Foods go up and down completely randomly.
Pair Corralation between Performance Food and Cal-Maine Foods
Assuming the 90 days trading horizon Performance Food Group is expected to generate 0.86 times more return on investment than Cal-Maine Foods. However, Performance Food Group is 1.16 times less risky than Cal-Maine Foods. It trades about 0.3 of its potential returns per unit of risk. Cal Maine Foods is currently generating about 0.23 per unit of risk. If you would invest 7,550 in Performance Food Group on August 29, 2024 and sell it today you would earn a total of 800.00 from holding Performance Food Group or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Performance Food Group vs. Cal Maine Foods
Performance |
| Timeline |
| Performance Food |
| Cal Maine Foods |
Performance Food and Cal-Maine Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Food and Cal-Maine Foods
The main advantage of trading using opposite Performance Food and Cal-Maine Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Food 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.| Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc | Performance Food vs. Apple Inc |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |