Correlation Between Maple Leaf and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Maple Leaf and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and SENECA FOODS-A.
Diversification Opportunities for Maple Leaf and SENECA FOODS-A
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maple and SENECA is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Maple Leaf i.e., Maple Leaf and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Maple Leaf and SENECA FOODS-A
Assuming the 90 days trading horizon Maple Leaf Foods is expected to under-perform the SENECA FOODS-A. But the stock apears to be less risky and, when comparing its historical volatility, Maple Leaf Foods is 1.54 times less risky than SENECA FOODS-A. The stock trades about -0.01 of its potential returns per unit of risk. The SENECA FOODS A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,300 in SENECA FOODS A on November 4, 2024 and sell it today you would earn a total of 1,400 from holding SENECA FOODS A or generate 26.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. SENECA FOODS A
Performance |
| Timeline |
| Maple Leaf Foods |
| SENECA FOODS A |
Maple Leaf and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and SENECA FOODS-A
The main advantage of trading using opposite Maple Leaf and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Maple Leaf vs. Australian Agricultural | Maple Leaf vs. Sumitomo Mitsui Construction | Maple Leaf vs. NTG Nordic Transport | Maple Leaf vs. China Railway Construction |
| SENECA FOODS-A vs. IMAGIN MEDICAL INC | SENECA FOODS-A vs. PEPTONIC MEDICAL | SENECA FOODS-A vs. INTERNET INJPADR 1 | SENECA FOODS-A vs. Diamyd Medical AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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