Correlation Between Eastwood Bio-Medical and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Eastwood Bio-Medical 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 Eastwood Bio-Medical and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastwood Bio Medical Canada and Maple Leaf Foods, you can compare the effects of market volatilities on Eastwood Bio-Medical 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 Eastwood Bio-Medical with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastwood Bio-Medical and Maple Leaf.
Diversification Opportunities for Eastwood Bio-Medical and Maple Leaf
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastwood and Maple is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Eastwood Bio Medical Canada 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 Eastwood Bio-Medical 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 Eastwood Bio Medical Canada 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 Eastwood Bio-Medical i.e., Eastwood Bio-Medical and Maple Leaf go up and down completely randomly.
Pair Corralation between Eastwood Bio-Medical and Maple Leaf
Assuming the 90 days horizon Eastwood Bio Medical Canada is expected to generate 12.67 times more return on investment than Maple Leaf. However, Eastwood Bio-Medical is 12.67 times more volatile than Maple Leaf Foods. It trades about 0.09 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.01 per unit of risk. If you would invest 60.00 in Eastwood Bio Medical Canada on August 31, 2024 and sell it today you would earn a total of 15.00 from holding Eastwood Bio Medical Canada or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Eastwood Bio Medical Canada vs. Maple Leaf Foods
Performance |
| Timeline |
| Eastwood Bio Medical |
| Maple Leaf Foods |
Eastwood Bio-Medical and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastwood Bio-Medical and Maple Leaf
The main advantage of trading using opposite Eastwood Bio-Medical and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastwood Bio-Medical 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.| Eastwood Bio-Medical vs. Saputo Inc | Eastwood Bio-Medical vs. Forstrong Global Income | Eastwood Bio-Medical vs. iShares Canadian HYBrid | Eastwood Bio-Medical vs. Brompton European Dividend |
| Maple Leaf vs. Saputo Inc | Maple Leaf vs. Forstrong Global Income | Maple Leaf vs. iShares Canadian HYBrid | Maple Leaf vs. Brompton European Dividend |
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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