Correlation Between Maple Leaf and ON SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and ON SEMICONDUCTOR 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 ON SEMICONDUCTOR 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 ON SEMICONDUCTOR, you can compare the effects of market volatilities on Maple Leaf and ON SEMICONDUCTOR 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 ON SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and ON SEMICONDUCTOR.
Diversification Opportunities for Maple Leaf and ON SEMICONDUCTOR
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maple and XS4 is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and ON SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ON SEMICONDUCTOR 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 ON SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ON SEMICONDUCTOR has no effect on the direction of Maple Leaf i.e., Maple Leaf and ON SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between Maple Leaf and ON SEMICONDUCTOR
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.65 times more return on investment than ON SEMICONDUCTOR. However, Maple Leaf Foods is 1.53 times less risky than ON SEMICONDUCTOR. It trades about 0.08 of its potential returns per unit of risk. ON SEMICONDUCTOR is currently generating about -0.35 per unit of risk. If you would invest 1,360 in Maple Leaf Foods on November 6, 2024 and sell it today you would earn a total of 40.00 from holding Maple Leaf Foods or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. ON SEMICONDUCTOR
Performance |
| Timeline |
| Maple Leaf Foods |
| ON SEMICONDUCTOR |
Maple Leaf and ON SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and ON SEMICONDUCTOR
The main advantage of trading using opposite Maple Leaf and ON SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, ON SEMICONDUCTOR 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 ON SEMICONDUCTOR will offset losses from the drop in ON SEMICONDUCTOR's long position.| Maple Leaf vs. BURLINGTON STORES | Maple Leaf vs. MARKET VECTR RETAIL | Maple Leaf vs. COSTCO WHOLESALE CDR | Maple Leaf vs. ANTA SPORTS PRODUCT |
| ON SEMICONDUCTOR vs. SLR Investment Corp | ON SEMICONDUCTOR vs. GungHo Online Entertainment | ON SEMICONDUCTOR vs. Gladstone Investment | ON SEMICONDUCTOR vs. CarsalesCom |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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