Correlation Between Maple Leaf and Millbank Mining
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Millbank Mining 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 Millbank Mining 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 Millbank Mining Corp, you can compare the effects of market volatilities on Maple Leaf and Millbank Mining 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 Millbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Millbank Mining.
Diversification Opportunities for Maple Leaf and Millbank Mining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Millbank is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Millbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millbank Mining 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 Millbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millbank Mining Corp has no effect on the direction of Maple Leaf i.e., Maple Leaf and Millbank Mining go up and down completely randomly.
Pair Corralation between Maple Leaf and Millbank Mining
Assuming the 90 days trading horizon Maple Leaf Foods is expected to under-perform the Millbank Mining. But the stock apears to be less risky and, when comparing its historical volatility, Maple Leaf Foods is 2.04 times less risky than Millbank Mining. The stock trades about -0.26 of its potential returns per unit of risk. The Millbank Mining Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Millbank Mining Corp on September 23, 2024 and sell it today you would lose (1.00) from holding Millbank Mining Corp or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Millbank Mining Corp
Performance |
| Timeline |
| Maple Leaf Foods |
| Millbank Mining Corp |
Maple Leaf and Millbank Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Millbank Mining
The main advantage of trading using opposite Maple Leaf and Millbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Millbank Mining 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 Millbank Mining will offset losses from the drop in Millbank Mining's long position.| Maple Leaf vs. Saputo Inc | Maple Leaf vs. Empire Company Limited | Maple Leaf vs. Premium Brands Holdings | Maple Leaf vs. Metro Inc |
| Millbank Mining vs. Maple Leaf Foods | Millbank Mining vs. Olympia Financial Group | Millbank Mining vs. iA Financial | Millbank Mining vs. Caribbean Utilities |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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