Correlation Between Major Drilling and Maple Peak
Can any of the company-specific risk be diversified away by investing in both Major Drilling and Maple Peak 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 Major Drilling and Maple Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Drilling Group and Maple Peak Investments, you can compare the effects of market volatilities on Major Drilling and Maple Peak 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 Major Drilling with a short position of Maple Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and Maple Peak.
Diversification Opportunities for Major Drilling and Maple Peak
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Major and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and Maple Peak Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Peak Investments and Major Drilling 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 Major Drilling Group are associated (or correlated) with Maple Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Peak Investments has no effect on the direction of Major Drilling i.e., Major Drilling and Maple Peak go up and down completely randomly.
Pair Corralation between Major Drilling and Maple Peak
Assuming the 90 days trading horizon Major Drilling Group is expected to under-perform the Maple Peak. But the stock apears to be less risky and, when comparing its historical volatility, Major Drilling Group is 5.88 times less risky than Maple Peak. The stock trades about -0.01 of its potential returns per unit of risk. The Maple Peak Investments is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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 |
Major Drilling Group vs. Maple Peak Investments
Performance |
| Timeline |
| Major Drilling Group |
| Maple Peak Investments |
Major Drilling and Maple Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and Maple Peak
The main advantage of trading using opposite Major Drilling and Maple Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling position performs unexpectedly, Maple Peak 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 Peak will offset losses from the drop in Maple Peak's long position.| Major Drilling vs. Algoma Steel Group | Major Drilling vs. Champion Iron | Major Drilling vs. International Zeolite Corp | Major Drilling vs. European Residential Real |
| Maple Peak vs. Brookfield Asset Management | Maple Peak vs. MAG Silver Corp | Maple Peak vs. NeXGold Mining Corp | Maple Peak vs. Doman Building Materials |
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 Stocks Directory module to find actively traded stocks across global markets.
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