Correlation Between Maple Peak and Maple Leaf

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

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

Diversification Opportunities for Maple Peak and Maple Leaf

0.0

Correlation Coefficient

Maple Peak  Maple Leaf

Pay attention - limited upside

The 3 months correlation between Maple and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maple Peak Investments 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 Maple Peak 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 Maple Peak Investments 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 Maple Peak i.e., Maple Peak and Maple Leaf go up and down completely randomly.

Pair Corralation between Maple Peak and Maple Leaf

If you would invest  1.00  in Maple Peak Investments on September 19, 2024 and sell it today you would earn a total of  0.00  from holding Maple Peak Investments or generate 0.0% return on investment over 90 days.

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

Maple Peak Investments  vs.  Maple Leaf Foods

Maple Peak Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maple Peak Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Maple Peak is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Maple Leaf Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maple Leaf Foods has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Maple Peak and Maple Leaf

The main advantage of trading using opposite Maple Peak and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Peak 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 Maple Peak Investments 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.