Correlation Between HPQ Silicon and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both HPQ Silicon 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 HPQ Silicon and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HPQ Silicon Resources and Maple Leaf Foods, you can compare the effects of market volatilities on HPQ Silicon 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 HPQ Silicon with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of HPQ Silicon and Maple Leaf.
Diversification Opportunities for HPQ Silicon and Maple Leaf
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HPQ and Maple is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding HPQ Silicon Resources 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 HPQ Silicon 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 HPQ Silicon Resources 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 HPQ Silicon i.e., HPQ Silicon and Maple Leaf go up and down completely randomly.
Pair Corralation between HPQ Silicon and Maple Leaf
Assuming the 90 days horizon HPQ Silicon Resources is expected to under-perform the Maple Leaf. In addition to that, HPQ Silicon is 2.32 times more volatile than Maple Leaf Foods. It trades about -0.22 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HPQ Silicon Resources vs. Maple Leaf Foods
Performance |
| Timeline |
| HPQ Silicon Resources |
| Maple Leaf Foods |
HPQ Silicon and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HPQ Silicon and Maple Leaf
The main advantage of trading using opposite HPQ Silicon and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HPQ Silicon 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.| HPQ Silicon vs. Kiplin Metals | HPQ Silicon vs. Pure Energy Minerals | HPQ Silicon vs. Noram Lithium Corp | HPQ Silicon vs. Minnova Corp |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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