Correlation Between Cal Maine and AgriFORCE Growing
Can any of the company-specific risk be diversified away by investing in both Cal Maine and AgriFORCE Growing 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 Cal Maine and AgriFORCE Growing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cal Maine Foods and AgriFORCE Growing Systems, you can compare the effects of market volatilities on Cal Maine and AgriFORCE Growing 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 Cal Maine with a short position of AgriFORCE Growing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and AgriFORCE Growing.
Diversification Opportunities for Cal Maine and AgriFORCE Growing
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal and AgriFORCE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and AgriFORCE Growing Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AgriFORCE Growing Systems and Cal Maine 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 Cal Maine Foods are associated (or correlated) with AgriFORCE Growing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AgriFORCE Growing Systems has no effect on the direction of Cal Maine i.e., Cal Maine and AgriFORCE Growing go up and down completely randomly.
Pair Corralation between Cal Maine and AgriFORCE Growing
Given the investment horizon of 90 days Cal Maine Foods is expected to generate 0.6 times more return on investment than AgriFORCE Growing. However, Cal Maine Foods is 1.66 times less risky than AgriFORCE Growing. It trades about -0.03 of its potential returns per unit of risk. AgriFORCE Growing Systems is currently generating about -0.14 per unit of risk. If you would invest 10,066 in Cal Maine Foods on December 28, 2024 and sell it today you would lose (845.00) from holding Cal Maine Foods or give up 8.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cal Maine Foods vs. AgriFORCE Growing Systems
Performance |
Timeline |
Cal Maine Foods |
AgriFORCE Growing Systems |
Cal Maine and AgriFORCE Growing Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cal Maine and AgriFORCE Growing
The main advantage of trading using opposite Cal Maine and AgriFORCE Growing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, AgriFORCE Growing 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 AgriFORCE Growing will offset losses from the drop in AgriFORCE Growing's long position.Cal Maine vs. Bunge Limited | Cal Maine vs. Tyson Foods | Cal Maine vs. Dole PLC | Cal Maine vs. Adecoagro SA |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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