Correlation Between CNJ Capital and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both CNJ Capital 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 CNJ Capital and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNJ Capital Investments and Maple Leaf Foods, you can compare the effects of market volatilities on CNJ Capital 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 CNJ Capital with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNJ Capital and Maple Leaf.
Diversification Opportunities for CNJ Capital and Maple Leaf
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNJ and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNJ Capital 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 CNJ Capital 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 CNJ Capital 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 CNJ Capital i.e., CNJ Capital and Maple Leaf go up and down completely randomly.
Pair Corralation between CNJ Capital and Maple Leaf
Assuming the 90 days trading horizon CNJ Capital Investments is expected to generate 3.07 times more return on investment than Maple Leaf. However, CNJ Capital is 3.07 times more volatile than Maple Leaf Foods. It trades about 0.04 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about -0.02 per unit of risk. If you would invest 35.00 in CNJ Capital Investments on September 14, 2024 and sell it today you would earn a total of 11.00 from holding CNJ Capital Investments or generate 31.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
CNJ Capital Investments vs. Maple Leaf Foods
Performance |
| Timeline |
| CNJ Capital Investments |
| Maple Leaf Foods |
CNJ Capital and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNJ Capital and Maple Leaf
The main advantage of trading using opposite CNJ Capital and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNJ Capital 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.| CNJ Capital vs. Berkshire Hathaway CDR | CNJ Capital vs. E L Financial Corp | CNJ Capital vs. E L Financial 3 | CNJ Capital vs. Molson Coors Canada |
| Maple Leaf vs. Leons Furniture Limited | Maple Leaf vs. Autocanada | Maple Leaf vs. Exco Technologies Limited |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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