Correlation Between Maple Leaf and Quipt Home
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Quipt Home 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 Quipt Home 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 Quipt Home Medical, you can compare the effects of market volatilities on Maple Leaf and Quipt Home 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 Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Quipt Home.
Diversification Opportunities for Maple Leaf and Quipt Home
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Quipt is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical 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 Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of Maple Leaf i.e., Maple Leaf and Quipt Home go up and down completely randomly.
Pair Corralation between Maple Leaf and Quipt Home
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.84 times more return on investment than Quipt Home. However, Maple Leaf Foods is 1.19 times less risky than Quipt Home. It trades about 0.2 of its potential returns per unit of risk. Quipt Home Medical is currently generating about -0.28 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 | 95.45% |
| Values | Daily Returns |
Maple Leaf Foods vs. Quipt Home Medical
Performance |
| Timeline |
| Maple Leaf Foods |
| Quipt Home Medical |
Maple Leaf and Quipt Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Quipt Home
The main advantage of trading using opposite Maple Leaf and Quipt Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Quipt Home 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 Quipt Home will offset losses from the drop in Quipt Home'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 |
| Quipt Home vs. VentriPoint Diagnostics | Quipt Home vs. Sirona Biochem Corp | Quipt Home vs. Reliq Health Technologies | Quipt Home vs. Microbix Biosystems |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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