Correlation Between Maple Leaf and Partners Value
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Partners Value 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 Partners Value 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 Partners Value Investments, you can compare the effects of market volatilities on Maple Leaf and Partners Value 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 Partners Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Partners Value.
Diversification Opportunities for Maple Leaf and Partners Value
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Maple and Partners is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Partners Value Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Value Inves 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 Partners Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Value Inves has no effect on the direction of Maple Leaf i.e., Maple Leaf and Partners Value go up and down completely randomly.
Pair Corralation between Maple Leaf and Partners Value
Assuming the 90 days trading horizon Maple Leaf is expected to generate 2.34 times less return on investment than Partners Value. But when comparing it to its historical volatility, Maple Leaf Foods is 1.38 times less risky than Partners Value. It trades about 0.11 of its potential returns per unit of risk. Partners Value Investments is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 12,600 in Partners Value Investments on September 3, 2024 and sell it today you would earn a total of 1,400 from holding Partners Value Investments or generate 11.11% 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. Partners Value Investments
Performance |
| Timeline |
| Maple Leaf Foods |
| Partners Value Inves |
Maple Leaf and Partners Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Partners Value
The main advantage of trading using opposite Maple Leaf and Partners Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Partners Value 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 Partners Value will offset losses from the drop in Partners Value'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 |
| Partners Value vs. Colliers International Group | Partners Value vs. Altus Group Limited | Partners Value vs. Harvest Global REIT | Partners Value vs. International Zeolite Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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