Correlation Between Aftermath Silver and Maple Leaf

Can any of the company-specific risk be diversified away by investing in both Aftermath Silver and Maple Leaf 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 Aftermath Silver and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Aftermath Silver and Maple Leaf

-0.07

Correlation Coefficient

Aftermath Silver  Maple Leaf

Good diversification

The 3 months correlation between Aftermath and Maple is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aftermath Silver and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods and Aftermath Silver 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 Aftermath Silver are associated (or correlated) with Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Aftermath Silver i.e., Aftermath Silver and Maple Leaf go up and down completely randomly.

Pair Corralation between Aftermath Silver and Maple Leaf

Assuming the 90 days horizon Aftermath Silver is expected to generate 3.94 times more return on investment than Maple Leaf. However, Aftermath Silver is 3.94 times more volatile than Maple Leaf Foods. It trades about 0.14 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.04 per unit of risk. If you would invest  31.00  in Aftermath Silver on September 3, 2024 and sell it today you would earn a total of  16.00  from holding Aftermath Silver or generate 51.61% return on investment over 90 days.

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

Aftermath Silver  vs.  Maple Leaf Foods

Aftermath Silver

Risk-Adjusted Performance

10 of 100

Good

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

Maple Leaf Foods

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Maple Leaf is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Aftermath Silver and Maple Leaf

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

The idea behind Aftermath Silver and Maple Leaf 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.