Correlation Between Maple Leaf and Planting Hope

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

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

Diversification Opportunities for Maple Leaf and Planting Hope

0.0

Correlation Coefficient

Maple Leaf  Planting Hope

Pay attention - limited upside

The 3 months correlation between Maple and Planting is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Planting Hope Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planting Hope and Maple Leaf 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 Leaf Foods are associated (or correlated) with Planting Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planting Hope has no effect on the direction of Maple Leaf i.e., Maple Leaf and Planting Hope go up and down completely randomly.

Pair Corralation between Maple Leaf and Planting Hope

If you would invest  2,193  in Maple Leaf Foods on September 15, 2024 and sell it today you would lose (5.00) from holding Maple Leaf Foods or give up 0.23% of portfolio value over 90 days.

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

Maple Leaf Foods  vs.  Planting Hope Co

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.

Planting Hope

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Maple Leaf and Planting Hope

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

The idea behind Maple Leaf Foods and Planting Hope Co 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.