Correlation Between Electra Battery and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both Electra Battery 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 Electra Battery and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Battery Materials and Maple Leaf Foods, you can compare the effects of market volatilities on Electra Battery 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 Electra Battery with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Maple Leaf.
Diversification Opportunities for Electra Battery and Maple Leaf
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Electra and Maple is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials 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 Electra Battery 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 Electra Battery Materials 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 Electra Battery i.e., Electra Battery and Maple Leaf go up and down completely randomly.
Pair Corralation between Electra Battery and Maple Leaf
Assuming the 90 days trading horizon Electra Battery Materials is expected to under-perform the Maple Leaf. In addition to that, Electra Battery is 1.35 times more volatile than Maple Leaf Foods. It trades about -0.1 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.18 per unit of volatility. If you would invest 2,106 in Maple Leaf Foods on September 1, 2024 and sell it today you would earn a total of 169.00 from holding Maple Leaf Foods or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Maple Leaf Foods
Performance |
| Timeline |
| Electra Battery Materials |
| Maple Leaf Foods |
Electra Battery and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Maple Leaf
The main advantage of trading using opposite Electra Battery and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery 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.| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
| Maple Leaf vs. Leons Furniture Limited | Maple Leaf vs. Autocanada | Maple Leaf vs. Premium Brands Holdings | 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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