Correlation Between CAL MAINE and ONWARD MEDICAL

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

Diversification Opportunities for CAL MAINE and ONWARD MEDICAL

0.47

Correlation Coefficient

CAL MAINE  ONWARD MEDICAL

Very weak diversification

The 3 months correlation between CAL and ONWARD is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of CAL MAINE i.e., CAL MAINE and ONWARD MEDICAL go up and down completely randomly.

Pair Corralation between CAL MAINE and ONWARD MEDICAL

Assuming the 90 days trading horizon CAL MAINE FOODS is expected to generate 0.46 times more return on investment than ONWARD MEDICAL. However, CAL MAINE FOODS is 2.18 times less risky than ONWARD MEDICAL. It trades about 0.16 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.04 per unit of risk. If you would invest  7,833  in CAL MAINE FOODS on April 25, 2025 and sell it today you would earn a total of  1,443  from holding CAL MAINE FOODS or generate 18.42% return on investment over 90 days.

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

CAL MAINE FOODS  vs.  ONWARD MEDICAL BV

CAL MAINE FOODS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CAL MAINE FOODS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, CAL MAINE exhibited solid returns over the last few months and may actually be approaching a breakup point.

ONWARD MEDICAL BV

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ONWARD MEDICAL BV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ONWARD MEDICAL may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with CAL MAINE and ONWARD MEDICAL

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

The idea behind CAL MAINE FOODS and ONWARD MEDICAL BV 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.