Correlation Between Maple Leaf and Rogers Communications
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Rogers Communications 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 Rogers Communications 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 Rogers Communications, you can compare the effects of market volatilities on Maple Leaf and Rogers Communications 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 Rogers Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Rogers Communications.
Diversification Opportunities for Maple Leaf and Rogers Communications
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Rogers is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Rogers Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rogers Communications 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 Rogers Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rogers Communications has no effect on the direction of Maple Leaf i.e., Maple Leaf and Rogers Communications go up and down completely randomly.
Pair Corralation between Maple Leaf and Rogers Communications
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 1.4 times more return on investment than Rogers Communications. However, Maple Leaf is 1.4 times more volatile than Rogers Communications. It trades about 0.12 of its potential returns per unit of risk. Rogers Communications is currently generating about -0.12 per unit of risk. If you would invest 2,163 in Maple Leaf Foods on August 25, 2024 and sell it today you would earn a total of 99.00 from holding Maple Leaf Foods or generate 4.58% 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. Rogers Communications
Performance |
| Timeline |
| Maple Leaf Foods |
| Rogers Communications |
Maple Leaf and Rogers Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Rogers Communications
The main advantage of trading using opposite Maple Leaf and Rogers Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Rogers Communications 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 Rogers Communications will offset losses from the drop in Rogers Communications' 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 |
| Rogers Communications vs. Boat Rocker Media | Rogers Communications vs. Maple Leaf Foods | Rogers Communications vs. Computer Modelling Group | Rogers Communications vs. Hemisphere Energy |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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