Correlation Between Maple Leaf and Stampede Drilling
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Stampede Drilling 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 Stampede Drilling 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 Stampede Drilling, you can compare the effects of market volatilities on Maple Leaf and Stampede Drilling 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 Stampede Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Stampede Drilling.
Diversification Opportunities for Maple Leaf and Stampede Drilling
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Maple and Stampede is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Stampede Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stampede Drilling 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 Stampede Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stampede Drilling has no effect on the direction of Maple Leaf i.e., Maple Leaf and Stampede Drilling go up and down completely randomly.
Pair Corralation between Maple Leaf and Stampede Drilling
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.51 times more return on investment than Stampede Drilling. However, Maple Leaf Foods is 1.97 times less risky than Stampede Drilling. It trades about -0.03 of its potential returns per unit of risk. Stampede Drilling is currently generating about -0.13 per unit of risk. If you would invest 2,220 in Maple Leaf Foods on September 15, 2024 and sell it today you would lose (32.00) from holding Maple Leaf Foods or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Stampede Drilling
Performance |
| Timeline |
| Maple Leaf Foods |
| Stampede Drilling |
Maple Leaf and Stampede Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Stampede Drilling
The main advantage of trading using opposite Maple Leaf and Stampede Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Stampede Drilling 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 Stampede Drilling will offset losses from the drop in Stampede Drilling's long position.| Maple Leaf vs. Leons Furniture Limited | Maple Leaf vs. Autocanada | Maple Leaf vs. Exco Technologies Limited |
| Stampede Drilling vs. Trican Well Service | Stampede Drilling vs. Ensign Energy Services | Stampede Drilling vs. Calfrac Well Services | Stampede Drilling vs. Birchcliff 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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