Correlation Between Maple Leaf and Galexxy Holdings
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Galexxy Holdings 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 Galexxy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Green and Galexxy Holdings, you can compare the effects of market volatilities on Maple Leaf and Galexxy Holdings 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 Galexxy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Galexxy Holdings.
Diversification Opportunities for Maple Leaf and Galexxy Holdings
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Galexxy is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Green and Galexxy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galexxy Holdings 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 Green are associated (or correlated) with Galexxy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galexxy Holdings has no effect on the direction of Maple Leaf i.e., Maple Leaf and Galexxy Holdings go up and down completely randomly.
Pair Corralation between Maple Leaf and Galexxy Holdings
Assuming the 90 days horizon Maple Leaf Green is expected to generate 1.88 times more return on investment than Galexxy Holdings. However, Maple Leaf is 1.88 times more volatile than Galexxy Holdings. It trades about 0.1 of its potential returns per unit of risk. Galexxy Holdings is currently generating about -0.13 per unit of risk. If you would invest 3.00 in Maple Leaf Green on August 25, 2024 and sell it today you would lose (0.03) from holding Maple Leaf Green or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Green vs. Galexxy Holdings
Performance |
| Timeline |
| Maple Leaf Green |
| Galexxy Holdings |
Maple Leaf and Galexxy Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Galexxy Holdings
The main advantage of trading using opposite Maple Leaf and Galexxy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Galexxy Holdings 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 Galexxy Holdings will offset losses from the drop in Galexxy Holdings' long position.| Maple Leaf vs. Rezolute | Maple Leaf vs. Tempest Therapeutics | Maple Leaf vs. Forte Biosciences | Maple Leaf vs. Dyadic International |
| Galexxy Holdings vs. Green Cures Botanical | Galexxy Holdings vs. Indoor Harvest Corp | Galexxy Holdings vs. Speakeasy Cannabis Club | Galexxy Holdings vs. City View Green |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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