Correlation Between Minerva SA and Cal Maine

Can any of the company-specific risk be diversified away by investing in both Minerva SA and Cal Maine 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 Minerva SA and Cal Maine into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Minerva SA and Cal Maine Foods, you can compare the effects of market volatilities on Minerva SA and Cal Maine 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 Minerva SA with a short position of Cal Maine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minerva SA and Cal Maine.

Diversification Opportunities for Minerva SA and Cal Maine

-0.52

Correlation Coefficient

Minerva SA  Cal Maine

Excellent diversification

The 3 months correlation between Minerva and Cal is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Minerva SA and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods and Minerva SA 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 Minerva SA are associated (or correlated) with Cal Maine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of Minerva SA i.e., Minerva SA and Cal Maine go up and down completely randomly.

Pair Corralation between Minerva SA and Cal Maine

Assuming the 90 days horizon Minerva SA is expected to generate 3.93 times more return on investment than Cal Maine. However, Minerva SA is 3.93 times more volatile than Cal Maine Foods. It trades about 0.11 of its potential returns per unit of risk. Cal Maine Foods is currently generating about -0.03 per unit of risk. If you would invest  343.00  in Minerva SA on December 29, 2024 and sell it today you would earn a total of  137.00  from holding Minerva SA or generate 39.94% return on investment over 90 days.

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

Minerva SA  vs.  Cal Maine Foods

Minerva SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Minerva SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Minerva SA showed solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Minerva SA and Cal Maine

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

The idea behind Minerva SA and Cal Maine Foods 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.