Correlation Between Maple Leaf and Information Services
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Information Services 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 Information Services 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 Information Services, you can compare the effects of market volatilities on Maple Leaf and Information Services 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 Information Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Information Services.
Diversification Opportunities for Maple Leaf and Information Services
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Maple and Information is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information Services 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 Information Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Services has no effect on the direction of Maple Leaf i.e., Maple Leaf and Information Services go up and down completely randomly.
Pair Corralation between Maple Leaf and Information Services
Assuming the 90 days trading horizon Maple Leaf is expected to generate 18.53 times less return on investment than Information Services. In addition to that, Maple Leaf is 2.02 times more volatile than Information Services. It trades about 0.0 of its total potential returns per unit of risk. Information Services is currently generating about 0.12 per unit of volatility. If you would invest 2,701 in Information Services on October 14, 2024 and sell it today you would earn a total of 69.00 from holding Information Services or generate 2.55% 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. Information Services
Performance |
| Timeline |
| Maple Leaf Foods |
| Information Services |
Maple Leaf and Information Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Information Services
The main advantage of trading using opposite Maple Leaf and Information Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Information Services 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 Information Services will offset losses from the drop in Information Services' 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 |
| Information Services vs. Orbit Garant Drilling | Information Services vs. Maple Leaf Foods | Information Services vs. AGF Management Limited | Information Services vs. Major Drilling Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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