Correlation Between Maple Leaf and Infinico Metals
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Infinico Metals 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 Infinico Metals 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 Infinico Metals Corp, you can compare the effects of market volatilities on Maple Leaf and Infinico Metals 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 Infinico Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Infinico Metals.
Diversification Opportunities for Maple Leaf and Infinico Metals
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maple and Infinico is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Infinico Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinico Metals Corp 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 Infinico Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinico Metals Corp has no effect on the direction of Maple Leaf i.e., Maple Leaf and Infinico Metals go up and down completely randomly.
Pair Corralation between Maple Leaf and Infinico Metals
Assuming the 90 days trading horizon Maple Leaf Foods is expected to under-perform the Infinico Metals. But the stock apears to be less risky and, when comparing its historical volatility, Maple Leaf Foods is 6.63 times less risky than Infinico Metals. The stock trades about -0.01 of its potential returns per unit of risk. The Infinico Metals Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Infinico Metals Corp on November 27, 2024 and sell it today you would lose (4.50) from holding Infinico Metals Corp or give up 75.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.62% |
| Values | Daily Returns |
Maple Leaf Foods vs. Infinico Metals Corp
Performance |
| Timeline |
| Maple Leaf Foods |
| Infinico Metals Corp |
Maple Leaf and Infinico Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Infinico Metals
The main advantage of trading using opposite Maple Leaf and Infinico Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Infinico Metals 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 Infinico Metals will offset losses from the drop in Infinico Metals' 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 |
| Infinico Metals vs. First Majestic Silver | Infinico Metals vs. Ivanhoe Energy | Infinico Metals vs. Flinders Resources Limited | Infinico Metals vs. Orezone Gold Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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