Correlation Between Maple Leaf and Lords Company
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Lords Company 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 Lords Company 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 Lords Company Worldwide, you can compare the effects of market volatilities on Maple Leaf and Lords Company 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 Lords Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Lords Company.
Diversification Opportunities for Maple Leaf and Lords Company
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Maple and Lords is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Green and Lords Company Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lords Worldwide 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 Lords Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lords Worldwide has no effect on the direction of Maple Leaf i.e., Maple Leaf and Lords Company go up and down completely randomly.
Pair Corralation between Maple Leaf and Lords Company
Assuming the 90 days horizon Maple Leaf Green is expected to generate 0.69 times more return on investment than Lords Company. However, Maple Leaf Green is 1.46 times less risky than Lords Company. It trades about 0.08 of its potential returns per unit of risk. Lords Company Worldwide is currently generating about 0.04 per unit of risk. If you would invest 3.50 in Maple Leaf Green on August 29, 2024 and sell it today you would lose (0.11) from holding Maple Leaf Green or give up 3.14% 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. Lords Company Worldwide
Performance |
| Timeline |
| Maple Leaf Green |
| Lords Worldwide |
Maple Leaf and Lords Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Lords Company
The main advantage of trading using opposite Maple Leaf and Lords Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Lords Company 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 Lords Company will offset losses from the drop in Lords Company's long position.| Maple Leaf vs. Rezolute | Maple Leaf vs. Tempest Therapeutics | Maple Leaf vs. Forte Biosciences | Maple Leaf vs. Dyadic International |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |