Correlation Between Maple Leaf and Senvest Capital
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Senvest Capital 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 Senvest Capital 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 Senvest Capital, you can compare the effects of market volatilities on Maple Leaf and Senvest Capital 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 Senvest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Senvest Capital.
Diversification Opportunities for Maple Leaf and Senvest Capital
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Maple and Senvest is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Senvest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senvest Capital 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 Senvest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senvest Capital has no effect on the direction of Maple Leaf i.e., Maple Leaf and Senvest Capital go up and down completely randomly.
Pair Corralation between Maple Leaf and Senvest Capital
Assuming the 90 days trading horizon Maple Leaf is expected to generate 1.38 times less return on investment than Senvest Capital. In addition to that, Maple Leaf is 2.72 times more volatile than Senvest Capital. It trades about 0.13 of its total potential returns per unit of risk. Senvest Capital is currently generating about 0.49 per unit of volatility. If you would invest 32,500 in Senvest Capital on September 14, 2024 and sell it today you would earn a total of 2,500 from holding Senvest Capital or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Foods vs. Senvest Capital
Performance |
| Timeline |
| Maple Leaf Foods |
| Senvest Capital |
Maple Leaf and Senvest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Senvest Capital
The main advantage of trading using opposite Maple Leaf and Senvest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Senvest Capital 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 Senvest Capital will offset losses from the drop in Senvest Capital's long position.| Maple Leaf vs. Leons Furniture Limited | Maple Leaf vs. Autocanada | Maple Leaf vs. Premium Brands Holdings | Maple Leaf vs. Exco Technologies Limited |
| Senvest Capital vs. Air Canada | Senvest Capital vs. Maple Leaf Foods | Senvest Capital vs. Leons Furniture Limited | Senvest Capital vs. Computer Modelling Group |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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