Correlation Between Alternative Investment and Cal Maine

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

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

Diversification Opportunities for Alternative Investment and Cal Maine

0.0

Correlation Coefficient

Alternative Investment  Cal Maine

Pay attention - limited upside

The 3 months correlation between Alternative and Cal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment 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 Alternative Investment 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 Alternative Investment 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 Alternative Investment i.e., Alternative Investment and Cal Maine go up and down completely randomly.

Pair Corralation between Alternative Investment and Cal Maine

If you would invest  0.01  in Alternative Investment on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Alternative Investment or generate 0.0% return on investment over 90 days.

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

Alternative Investment  vs.  Cal Maine Foods

Alternative Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alternative Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward-looking signals, Alternative Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Cal Maine Foods

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Maine Foods are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy essential indicators, Cal Maine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Alternative Investment and Cal Maine

The main advantage of trading using opposite Alternative Investment and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment 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 Alternative Investment 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 Transaction History module to view history of all your transactions and understand their impact on performance.