Correlation Between Maple Leaf and Altagas Cum
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Altagas Cum 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 Altagas Cum 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 Altagas Cum Red, you can compare the effects of market volatilities on Maple Leaf and Altagas Cum 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 Altagas Cum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Altagas Cum.
Diversification Opportunities for Maple Leaf and Altagas Cum
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maple and Altagas is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Altagas Cum Red in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altagas Cum Red 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 Altagas Cum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altagas Cum Red has no effect on the direction of Maple Leaf i.e., Maple Leaf and Altagas Cum go up and down completely randomly.
Pair Corralation between Maple Leaf and Altagas Cum
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 2.62 times more return on investment than Altagas Cum. However, Maple Leaf is 2.62 times more volatile than Altagas Cum Red. It trades about 0.19 of its potential returns per unit of risk. Altagas Cum Red is currently generating about 0.35 per unit of risk. If you would invest 2,135 in Maple Leaf Foods on August 31, 2024 and sell it today you would earn a total of 178.00 from holding Maple Leaf Foods or generate 8.34% 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. Altagas Cum Red
Performance |
| Timeline |
| Maple Leaf Foods |
| Altagas Cum Red |
Maple Leaf and Altagas Cum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Altagas Cum
The main advantage of trading using opposite Maple Leaf and Altagas Cum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Altagas Cum 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 Altagas Cum will offset losses from the drop in Altagas Cum's long position.| Maple Leaf vs. Saputo Inc | Maple Leaf vs. Forstrong Global Income | Maple Leaf vs. iShares Canadian HYBrid | Maple Leaf vs. Brompton European Dividend |
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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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