Correlation Between Cal Maine and Virtu Financial

Can any of the company-specific risk be diversified away by investing in both Cal Maine and Virtu Financial 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 Virtu Financial 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 Virtu Financial, you can compare the effects of market volatilities on Cal Maine and Virtu Financial 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 Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal Maine and Virtu Financial.

Diversification Opportunities for Cal Maine and Virtu Financial

0.64

Correlation Coefficient

Cal Maine  Virtu Financial

Poor diversification

The 3 months correlation between Cal and Virtu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial 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 Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Cal Maine i.e., Cal Maine and Virtu Financial go up and down completely randomly.

Pair Corralation between Cal Maine and Virtu Financial

Assuming the 90 days trading horizon Cal Maine Foods is expected to under-perform the Virtu Financial. In addition to that, Cal Maine is 1.58 times more volatile than Virtu Financial. It trades about -0.07 of its total potential returns per unit of risk. Virtu Financial is currently generating about 0.03 per unit of volatility. If you would invest  3,378  in Virtu Financial on December 23, 2024 and sell it today you would earn a total of  82.00  from holding Virtu Financial or generate 2.43% return on investment over 90 days.

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

Cal Maine Foods  vs.  Virtu Financial

Cal Maine Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cal Maine Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Virtu Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virtu Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Virtu Financial is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cal Maine and Virtu Financial

The main advantage of trading using opposite Cal Maine and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Maine position performs unexpectedly, Virtu Financial 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.

The idea behind Cal Maine Foods and Virtu Financial 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.