Correlation Between Teradata Corp and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Teradata Corp 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 Teradata Corp and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradata Corp and Maple Leaf Foods, you can compare the effects of market volatilities on Teradata Corp 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 Teradata Corp with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradata Corp and Maple Leaf.
Diversification Opportunities for Teradata Corp and Maple Leaf
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teradata and Maple is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp 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 Teradata Corp 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 Teradata Corp 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 Teradata Corp i.e., Teradata Corp and Maple Leaf go up and down completely randomly.
Pair Corralation between Teradata Corp and Maple Leaf
Assuming the 90 days horizon Teradata Corp is expected to generate 25.02 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, Teradata Corp is 1.43 times less risky than Maple Leaf. It trades about 0.01 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,350 in Maple Leaf Foods on October 25, 2024 and sell it today you would earn a total of 60.00 from holding Maple Leaf Foods or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Teradata Corp vs. Maple Leaf Foods
Performance |
| Timeline |
| Teradata Corp |
| Maple Leaf Foods |
Teradata Corp and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradata Corp and Maple Leaf
The main advantage of trading using opposite Teradata Corp and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradata Corp 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.| Teradata Corp vs. Ribbon Communications | Teradata Corp vs. COMPUTERSHARE | Teradata Corp vs. Compagnie Plastic Omnium | Teradata Corp vs. Rayonier Advanced Materials |
| Maple Leaf vs. WT OFFSHORE | Maple Leaf vs. Electronic Arts | Maple Leaf vs. SIEM OFFSHORE NEW | Maple Leaf vs. UNIQA INSURANCE GR |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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