Correlation Between Cal Maine and Onxeo SA

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

Diversification Opportunities for Cal Maine and Onxeo SA

-0.14

Correlation Coefficient

Cal Maine  Onxeo SA

Good diversification

The 3 months correlation between Cal and Onxeo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and Onxeo SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onxeo SA 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 Onxeo SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onxeo SA has no effect on the direction of Cal Maine i.e., Cal Maine and Onxeo SA go up and down completely randomly.

Pair Corralation between Cal Maine and Onxeo SA

Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 0.27 times more return on investment than Onxeo SA. However, Cal Maine Foods is 3.67 times less risky than Onxeo SA. It trades about 0.17 of its potential returns per unit of risk. Onxeo SA is currently generating about 0.01 per unit of risk. If you would invest  4,089  in Cal Maine Foods on October 21, 2024 and sell it today you would earn a total of  7,076  from holding Cal Maine Foods or generate 173.05% return on investment over 90 days.

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

Cal Maine Foods  vs.  Onxeo SA

Cal Maine Foods

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Maine Foods are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Cal Maine unveiled solid returns over the last few months and may actually be approaching a breakup point.

Onxeo SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Onxeo SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Onxeo SA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cal Maine and Onxeo SA

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

The idea behind Cal Maine Foods and Onxeo SA 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.