Correlation Between Maple Leaf and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and INTEL CDR 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 INTEL CDR 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 INTEL CDR, you can compare the effects of market volatilities on Maple Leaf and INTEL CDR 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 INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and INTEL CDR.
Diversification Opportunities for Maple Leaf and INTEL CDR
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Maple and INTEL is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Maple Leaf i.e., Maple Leaf and INTEL CDR go up and down completely randomly.
Pair Corralation between Maple Leaf and INTEL CDR
Assuming the 90 days trading horizon Maple Leaf is expected to generate 1.43 times less return on investment than INTEL CDR. But when comparing it to its historical volatility, Maple Leaf Foods is 1.79 times less risky than INTEL CDR. It trades about 0.14 of its potential returns per unit of risk. INTEL CDR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,346 in INTEL CDR on August 27, 2024 and sell it today you would earn a total of 96.00 from holding INTEL CDR or generate 7.13% 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. INTEL CDR
Performance |
| Timeline |
| Maple Leaf Foods |
| INTEL CDR |
Maple Leaf and INTEL CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and INTEL CDR
The main advantage of trading using opposite Maple Leaf and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, INTEL CDR 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 INTEL CDR will offset losses from the drop in INTEL CDR'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 |
| INTEL CDR vs. Maple Leaf Foods | INTEL CDR vs. Marimaca Copper Corp | INTEL CDR vs. NeXGold Mining Corp | INTEL CDR vs. Chemtrade Logistics Income |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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