Correlation Between Maple Leaf and Aftermath Silver
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Aftermath Silver 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 Aftermath Silver 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 Aftermath Silver, you can compare the effects of market volatilities on Maple Leaf and Aftermath Silver 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 Aftermath Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Aftermath Silver.
Diversification Opportunities for Maple Leaf and Aftermath Silver
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Maple and Aftermath is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver 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 Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of Maple Leaf i.e., Maple Leaf and Aftermath Silver go up and down completely randomly.
Pair Corralation between Maple Leaf and Aftermath Silver
Assuming the 90 days trading horizon Maple Leaf Foods is expected to under-perform the Aftermath Silver. But the stock apears to be less risky and, when comparing its historical volatility, Maple Leaf Foods is 3.86 times less risky than Aftermath Silver. The stock trades about -0.07 of its potential returns per unit of risk. The Aftermath Silver is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Aftermath Silver on October 7, 2024 and sell it today you would earn a total of 12.00 from holding Aftermath Silver or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Aftermath Silver
Performance |
| Timeline |
| Maple Leaf Foods |
| Aftermath Silver |
Maple Leaf and Aftermath Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Aftermath Silver
The main advantage of trading using opposite Maple Leaf and Aftermath Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Aftermath Silver 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 Aftermath Silver will offset losses from the drop in Aftermath Silver's long position.| Maple Leaf vs. Saputo Inc | Maple Leaf vs. George Weston Limited | Maple Leaf vs. Empire Company Limited | Maple Leaf vs. Premium Brands Holdings |
| Aftermath Silver vs. Medical Facilities | Aftermath Silver vs. A W FOOD | Aftermath Silver vs. High Liner Foods | Aftermath Silver vs. Quipt Home Medical |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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