Correlation Between Maple Leaf and Plaza Retail
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Plaza Retail 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 Plaza Retail 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 Plaza Retail REIT, you can compare the effects of market volatilities on Maple Leaf and Plaza Retail 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 Plaza Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Plaza Retail.
Diversification Opportunities for Maple Leaf and Plaza Retail
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Plaza is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Plaza Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plaza Retail REIT 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 Plaza Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plaza Retail REIT has no effect on the direction of Maple Leaf i.e., Maple Leaf and Plaza Retail go up and down completely randomly.
Pair Corralation between Maple Leaf and Plaza Retail
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 3.72 times more return on investment than Plaza Retail. However, Maple Leaf is 3.72 times more volatile than Plaza Retail REIT. It trades about 0.21 of its potential returns per unit of risk. Plaza Retail REIT is currently generating about -0.16 per unit of risk. If you would invest 2,146 in Maple Leaf Foods on August 28, 2024 and sell it today you would earn a total of 188.00 from holding Maple Leaf Foods or generate 8.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Plaza Retail REIT
Performance |
| Timeline |
| Maple Leaf Foods |
| Plaza Retail REIT |
Maple Leaf and Plaza Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Plaza Retail
The main advantage of trading using opposite Maple Leaf and Plaza Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Plaza Retail 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 Plaza Retail will offset losses from the drop in Plaza Retail'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 |
| Plaza Retail vs. Berkshire Hathaway CDR | Plaza Retail vs. E L Financial Corp | Plaza Retail vs. E L Financial 3 | Plaza Retail vs. Molson Coors Canada |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |