Correlation Between Cal Maine and DOCDATA

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

Diversification Opportunities for Cal Maine and DOCDATA

-0.47

Correlation Coefficient

Cal Maine  DOCDATA

Very good diversification

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

Pair Corralation between Cal Maine and DOCDATA

Assuming the 90 days trading horizon Cal Maine Foods is expected to generate 1.0 times more return on investment than DOCDATA. However, Cal Maine is 1.0 times more volatile than DOCDATA. It trades about 0.06 of its potential returns per unit of risk. DOCDATA is currently generating about -0.08 per unit of risk. If you would invest  8,291  in Cal Maine Foods on May 8, 2025 and sell it today you would earn a total of  699.00  from holding Cal Maine Foods or generate 8.43% return on investment over 90 days.

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

Cal Maine Foods  vs.  DOCDATA

Cal Maine Foods

Risk-Adjusted Performance

Soft

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 comparatively fragile basic indicators, Cal Maine may actually be approaching a critical reversion point that can send shares even higher in September 2025.

DOCDATA

Risk-Adjusted Performance

Weakest

Over the last 90 days DOCDATA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Cal Maine and DOCDATA

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

The idea behind Cal Maine Foods and DOCDATA 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.