Correlation Between Maple Leaf and TRAVEL LEISURE
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and TRAVEL LEISURE 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 Maple Leaf and TRAVEL LEISURE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Foods and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on Maple Leaf and TRAVEL LEISURE 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 Maple Leaf with a short position of TRAVEL LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and TRAVEL LEISURE.
Diversification Opportunities for Maple Leaf and TRAVEL LEISURE
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maple and TRAVEL is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and Maple Leaf 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 Maple Leaf Foods are associated (or correlated) with TRAVEL LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of Maple Leaf i.e., Maple Leaf and TRAVEL LEISURE go up and down completely randomly.
Pair Corralation between Maple Leaf and TRAVEL LEISURE
Assuming the 90 days trading horizon Maple Leaf is expected to generate 1.27 times less return on investment than TRAVEL LEISURE. In addition to that, Maple Leaf is 1.27 times more volatile than TRAVEL LEISURE DL 01. It trades about 0.12 of its total potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.19 per unit of volatility. If you would invest 4,880 in TRAVEL LEISURE DL 01 on November 1, 2024 and sell it today you would earn a total of 270.00 from holding TRAVEL LEISURE DL 01 or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Maple Leaf Foods vs. TRAVEL LEISURE DL 01
Performance |
| Timeline |
| Maple Leaf Foods |
| TRAVEL LEISURE DL |
Maple Leaf and TRAVEL LEISURE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and TRAVEL LEISURE
The main advantage of trading using opposite Maple Leaf and TRAVEL LEISURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, TRAVEL LEISURE 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 TRAVEL LEISURE will offset losses from the drop in TRAVEL LEISURE's long position.| Maple Leaf vs. Diamyd Medical AB | Maple Leaf vs. Peijia Medical Limited | Maple Leaf vs. IMAGIN MEDICAL INC | Maple Leaf vs. CREO MEDICAL GRP |
| TRAVEL LEISURE vs. FIRST SHIP LEASE | TRAVEL LEISURE vs. GRENKELEASING Dusseldorf | TRAVEL LEISURE vs. Maple Leaf Foods | TRAVEL LEISURE vs. Lendlease Group |
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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