Correlation Between CAL MAINE and HEICO

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

Diversification Opportunities for CAL MAINE and HEICO

0.74

Correlation Coefficient

CAL MAINE  HEICO

Poor diversification

The 3 months correlation between CAL and HEICO is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding CAL MAINE FOODS and HEICO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEICO 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 HEICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEICO has no effect on the direction of CAL MAINE i.e., CAL MAINE and HEICO go up and down completely randomly.

Pair Corralation between CAL MAINE and HEICO

Assuming the 90 days trading horizon CAL MAINE is expected to generate 1.65 times less return on investment than HEICO. But when comparing it to its historical volatility, CAL MAINE FOODS is 1.21 times less risky than HEICO. It trades about 0.14 of its potential returns per unit of risk. HEICO is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  21,182  in HEICO on April 24, 2025 and sell it today you would earn a total of  5,608  from holding HEICO or generate 26.48% return on investment over 90 days.

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

CAL MAINE FOODS  vs.  HEICO

CAL MAINE FOODS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CAL MAINE FOODS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, CAL MAINE exhibited solid returns over the last few months and may actually be approaching a breakup point.

HEICO

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HEICO are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEICO reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CAL MAINE and HEICO

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

The idea behind CAL MAINE FOODS and HEICO 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 Stocks Directory module to find actively traded stocks across global markets.