Correlation Between Maple Peak and Major Drilling
Can any of the company-specific risk be diversified away by investing in both Maple Peak and Major Drilling 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 Peak and Major Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Peak Investments and Major Drilling Group, you can compare the effects of market volatilities on Maple Peak and Major Drilling 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 Peak with a short position of Major Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Peak and Major Drilling.
Diversification Opportunities for Maple Peak and Major Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Maple and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maple Peak Investments and Major Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major Drilling Group and Maple Peak 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 Peak Investments are associated (or correlated) with Major Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major Drilling Group has no effect on the direction of Maple Peak i.e., Maple Peak and Major Drilling go up and down completely randomly.
Pair Corralation between Maple Peak and Major Drilling
Assuming the 90 days horizon Maple Peak Investments is expected to generate 5.88 times more return on investment than Major Drilling. However, Maple Peak is 5.88 times more volatile than Major Drilling Group. It trades about 0.05 of its potential returns per unit of risk. Major Drilling Group is currently generating about -0.01 per unit of risk. If you would invest 1.00 in Maple Peak Investments on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Maple Peak Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Maple Peak Investments vs. Major Drilling Group
Performance |
| Timeline |
| Maple Peak Investments |
| Major Drilling Group |
Maple Peak and Major Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Peak and Major Drilling
The main advantage of trading using opposite Maple Peak and Major Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Peak position performs unexpectedly, Major Drilling 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 Major Drilling will offset losses from the drop in Major Drilling's long position.| Maple Peak vs. Brookfield Asset Management | Maple Peak vs. MAG Silver Corp | Maple Peak vs. NeXGold Mining Corp | Maple Peak vs. Doman Building Materials |
| Major Drilling vs. Algoma Steel Group | Major Drilling vs. Champion Iron | Major Drilling vs. International Zeolite Corp | Major Drilling vs. European Residential Real |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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