Correlation Between Maple Leaf and Astron Connect
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Astron Connect 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 Astron Connect 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 Astron Connect, you can compare the effects of market volatilities on Maple Leaf and Astron Connect 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 Astron Connect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Astron Connect.
Diversification Opportunities for Maple Leaf and Astron Connect
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maple and Astron is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Astron Connect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astron Connect 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 Astron Connect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astron Connect has no effect on the direction of Maple Leaf i.e., Maple Leaf and Astron Connect go up and down completely randomly.
Pair Corralation between Maple Leaf and Astron Connect
Assuming the 90 days trading horizon Maple Leaf Foods is expected to under-perform the Astron Connect. But the stock apears to be less risky and, when comparing its historical volatility, Maple Leaf Foods is 6.93 times less risky than Astron Connect. The stock trades about -0.04 of its potential returns per unit of risk. The Astron Connect is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Astron Connect on October 18, 2024 and sell it today you would earn a total of 1.00 from holding Astron Connect or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Astron Connect
Performance |
| Timeline |
| Maple Leaf Foods |
| Astron Connect |
Maple Leaf and Astron Connect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Astron Connect
The main advantage of trading using opposite Maple Leaf and Astron Connect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Astron Connect 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 Astron Connect will offset losses from the drop in Astron Connect'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 |
| Astron Connect vs. Costco Wholesale Corp | Astron Connect vs. Verizon Communications CDR | Astron Connect vs. Bank of Nova | Astron Connect vs. Maple Leaf Foods |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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