Correlation Between Corporate Travel and CAL MAINE

Can any of the company-specific risk be diversified away by investing in both Corporate Travel 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 Corporate Travel and CAL MAINE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Corporate Travel Management and CAL MAINE FOODS, you can compare the effects of market volatilities on Corporate Travel 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 Corporate Travel with a short position of CAL MAINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Travel and CAL MAINE.

Diversification Opportunities for Corporate Travel and CAL MAINE

0.46

Correlation Coefficient

Corporate Travel  CAL MAINE

Very weak diversification

The 3 months correlation between Corporate and CAL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Travel Management 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 Corporate Travel 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 Corporate Travel Management 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 Corporate Travel i.e., Corporate Travel and CAL MAINE go up and down completely randomly.

Pair Corralation between Corporate Travel and CAL MAINE

Assuming the 90 days trading horizon Corporate Travel is expected to generate 31.79 times less return on investment than CAL MAINE. In addition to that, Corporate Travel is 1.47 times more volatile than CAL MAINE FOODS. It trades about 0.01 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.35 per unit of volatility. If you would invest  6,442  in CAL MAINE FOODS on September 26, 2024 and sell it today you would earn a total of  3,382  from holding CAL MAINE FOODS or generate 52.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Corporate Travel Management  vs.  CAL MAINE FOODS

Corporate Travel Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corporate Travel Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Corporate Travel is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

CAL MAINE FOODS

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CAL MAINE FOODS are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CAL MAINE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corporate Travel and CAL MAINE

The main advantage of trading using opposite Corporate Travel and CAL MAINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Travel 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.

The idea behind Corporate Travel Management and CAL MAINE FOODS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.