Correlation Between TOREX SEMICONDUCTOR and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOREX SEMICONDUCTOR LTD and Maple Leaf Foods, you can compare the effects of market volatilities on TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOREX SEMICONDUCTOR and Maple Leaf.
Diversification Opportunities for TOREX SEMICONDUCTOR and Maple Leaf
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between TOREX and Maple is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR 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 TOREX SEMICONDUCTOR LTD 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 TOREX SEMICONDUCTOR i.e., TOREX SEMICONDUCTOR and Maple Leaf go up and down completely randomly.
Pair Corralation between TOREX SEMICONDUCTOR and Maple Leaf
Assuming the 90 days horizon TOREX SEMICONDUCTOR is expected to generate 5.1 times less return on investment than Maple Leaf. In addition to that, TOREX SEMICONDUCTOR is 1.26 times more volatile than Maple Leaf Foods. It trades about 0.01 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.09 per unit of volatility. If you would invest 1,370 in Maple Leaf Foods on October 21, 2024 and sell it today you would earn a total of 40.00 from holding Maple Leaf Foods or generate 2.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TOREX SEMICONDUCTOR LTD vs. Maple Leaf Foods
Performance |
Timeline |
TOREX SEMICONDUCTOR LTD |
Maple Leaf Foods |
TOREX SEMICONDUCTOR and Maple Leaf Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TOREX SEMICONDUCTOR and Maple Leaf
The main advantage of trading using opposite TOREX SEMICONDUCTOR and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOREX SEMICONDUCTOR 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.TOREX SEMICONDUCTOR vs. CARDINAL HEALTH | TOREX SEMICONDUCTOR vs. NIGHTINGALE HEALTH EO | TOREX SEMICONDUCTOR vs. OPKO HEALTH | TOREX SEMICONDUCTOR vs. WILLIS LEASE FIN |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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