Correlation Between Cal Maine and YAMATO HOLDINGS

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

Diversification Opportunities for Cal Maine and YAMATO HOLDINGS

0.0

Correlation Coefficient

Cal Maine  YAMATO HOLDINGS

Pay attention - limited upside

The 3 months correlation between Cal and YAMATO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cal Maine Foods and YAMATO HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YAMATO HOLDINGS 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 YAMATO HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YAMATO HOLDINGS has no effect on the direction of Cal Maine i.e., Cal Maine and YAMATO HOLDINGS go up and down completely randomly.

Pair Corralation between Cal Maine and YAMATO HOLDINGS

If you would invest  6,589  in Cal Maine Foods on October 24, 2024 and sell it today you would earn a total of  4,296  from holding Cal Maine Foods or generate 65.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Cal Maine Foods  vs.  YAMATO HOLDINGS

Cal Maine Foods

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Maine Foods are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Cal Maine unveiled solid returns over the last few months and may actually be approaching a breakup point.

YAMATO HOLDINGS

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Cal Maine and YAMATO HOLDINGS

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

The idea behind Cal Maine Foods and YAMATO HOLDINGS 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.