Correlation Between Cal-Maine Foods and Walt Disney
Can any of the company-specific risk be diversified away by investing in both Cal-Maine Foods and Walt Disney 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 Foods and Walt Disney 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 The Walt Disney, you can compare the effects of market volatilities on Cal-Maine Foods and Walt Disney 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 Foods with a short position of Walt Disney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cal-Maine Foods and Walt Disney.
Diversification Opportunities for Cal-Maine Foods and Walt Disney
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cal-Maine and Walt is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and The Walt Disney in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Walt Disney and Cal-Maine Foods 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 Walt Disney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Walt Disney has no effect on the direction of Cal-Maine Foods i.e., Cal-Maine Foods and Walt Disney go up and down completely randomly.
Pair Corralation between Cal-Maine Foods and Walt Disney
Assuming the 90 days trading horizon Cal Maine Foods is expected to under-perform the Walt Disney. In addition to that, Cal-Maine Foods is 2.22 times more volatile than The Walt Disney. It trades about -0.12 of its total potential returns per unit of risk. The Walt Disney is currently generating about -0.16 per unit of volatility. If you would invest 10,762 in The Walt Disney on December 20, 2024 and sell it today you would lose (1,551) from holding The Walt Disney or give up 14.41% 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. The Walt Disney
Performance |
Timeline |
Cal Maine Foods |
Walt Disney |
Cal-Maine Foods and Walt Disney Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cal-Maine Foods and Walt Disney
The main advantage of trading using opposite Cal-Maine Foods and Walt Disney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal-Maine Foods position performs unexpectedly, Walt Disney 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 Walt Disney will offset losses from the drop in Walt Disney's long position.Cal-Maine Foods vs. Lamar Advertising | Cal-Maine Foods vs. Gruppo Mutuionline SpA | Cal-Maine Foods vs. PACIFIC ONLINE | Cal-Maine Foods vs. Hastings Technology Metals |
Walt Disney vs. JAPAN TOBACCO UNSPADR12 | Walt Disney vs. China Foods Limited | Walt Disney vs. Collins Foods Limited | Walt Disney vs. United Utilities Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |