Correlation Between TELES Informationstech and Cal Maine

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

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

Diversification Opportunities for TELES Informationstech and Cal Maine

-0.71

Correlation Coefficient

TELES Informationstech  Cal Maine

Pay attention - limited upside

The 3 months correlation between TELES and Cal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding TELES Informationstechnologien 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 TELES Informationstech 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 TELES Informationstechnologien AG 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 TELES Informationstech i.e., TELES Informationstech and Cal Maine go up and down completely randomly.

Pair Corralation between TELES Informationstech and Cal Maine

Assuming the 90 days trading horizon TELES Informationstechnologien AG is expected to under-perform the Cal Maine. In addition to that, TELES Informationstech is 1.26 times more volatile than Cal Maine Foods. It trades about -0.14 of its total potential returns per unit of risk. Cal Maine Foods is currently generating about 0.29 per unit of volatility. If you would invest  6,328  in Cal Maine Foods on September 3, 2024 and sell it today you would earn a total of  2,812  from holding Cal Maine Foods or generate 44.44% return on investment over 90 days.

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

TELES Informationstechnologien  vs.  Cal Maine Foods

TELES Informationstech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TELES Informationstechnologien AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cal Maine Foods

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Maine Foods are ranked lower than 22 (%) 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.

Pair Trading with TELES Informationstech and Cal Maine

The main advantage of trading using opposite TELES Informationstech and Cal Maine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TELES Informationstech 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 TELES Informationstechnologien AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.