Correlation Between Evertz Technologies and Maple Leaf

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

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

Diversification Opportunities for Evertz Technologies and Maple Leaf

-0.01

Correlation Coefficient

Evertz Technologies  Maple Leaf

Good diversification

The 3 months correlation between Evertz and Maple is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited 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 Evertz Technologies 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 Evertz Technologies Limited 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 Evertz Technologies i.e., Evertz Technologies and Maple Leaf go up and down completely randomly.

Pair Corralation between Evertz Technologies and Maple Leaf

Assuming the 90 days horizon Evertz Technologies is expected to generate 3.15 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, Evertz Technologies Limited is 1.87 times less risky than Maple Leaf. It trades about 0.1 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,162  in Maple Leaf Foods on September 5, 2024 and sell it today you would earn a total of  181.00  from holding Maple Leaf Foods or generate 8.37% return on investment over 90 days.

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

Evertz Technologies Limited  vs.  Maple Leaf Foods

Evertz Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Evertz Technologies Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Maple Leaf Foods

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Maple Leaf may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Evertz Technologies and Maple Leaf

The main advantage of trading using opposite Evertz Technologies and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evertz Technologies 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 Evertz Technologies Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.