Correlation Between Maple Leaf and Mako Mining
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Mako 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 Mako 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 Mako Mining Corp, you can compare the effects of market volatilities on Maple Leaf and Mako 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 Mako Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Mako Mining.
Diversification Opportunities for Maple Leaf and Mako Mining
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Maple and Mako is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Mako Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mako 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 Mako Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mako Mining Corp has no effect on the direction of Maple Leaf i.e., Maple Leaf and Mako Mining go up and down completely randomly.
Pair Corralation between Maple Leaf and Mako Mining
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.95 times more return on investment than Mako Mining. However, Maple Leaf Foods is 1.05 times less risky than Mako Mining. It trades about 0.11 of its potential returns per unit of risk. Mako Mining Corp is currently generating about -0.12 per unit of risk. If you would invest 2,162 in Maple Leaf Foods on September 3, 2024 and sell it today you would earn a total of 98.00 from holding Maple Leaf Foods or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Mako Mining Corp
Performance |
| Timeline |
| Maple Leaf Foods |
| Mako Mining Corp |
Maple Leaf and Mako Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Mako Mining
The main advantage of trading using opposite Maple Leaf and Mako Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Mako 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 Mako Mining will offset losses from the drop in Mako Mining'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 |
| Mako Mining vs. Thor Explorations | Mako Mining vs. K2 Gold | Mako Mining vs. Loncor Resources | Mako Mining vs. Sarama Resource |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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