Correlation Between EBRO FOODS and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS 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 EBRO FOODS and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and Maple Leaf Foods, you can compare the effects of market volatilities on EBRO FOODS 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 EBRO FOODS with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and Maple Leaf.
Diversification Opportunities for EBRO FOODS and Maple Leaf
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between EBRO and Maple is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS i.e., EBRO FOODS and Maple Leaf go up and down completely randomly.
Pair Corralation between EBRO FOODS and Maple Leaf
Assuming the 90 days trading horizon EBRO FOODS is expected to generate 5.27 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, EBRO FOODS is 1.78 times less risky than Maple Leaf. It trades about 0.03 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,360 in Maple Leaf Foods on November 5, 2024 and sell it today you would earn a total of 40.00 from holding Maple Leaf Foods or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBRO FOODS vs. Maple Leaf Foods
Performance |
| Timeline |
| EBRO FOODS |
| Maple Leaf Foods |
EBRO FOODS and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and Maple Leaf
The main advantage of trading using opposite EBRO FOODS and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS 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.| EBRO FOODS vs. TRI CHEMICAL LABORATINC | EBRO FOODS vs. CHEMICAL INDUSTRIES | EBRO FOODS vs. Sekisui Chemical Co | EBRO FOODS vs. WESANA HEALTH HOLD |
| Maple Leaf vs. BURLINGTON STORES | Maple Leaf vs. MARKET VECTR RETAIL | Maple Leaf vs. COSTCO WHOLESALE CDR | Maple Leaf vs. ANTA SPORTS PRODUCT |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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