Correlation Between Maple Leaf and Painreform
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Painreform 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 Painreform 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 Painreform, you can compare the effects of market volatilities on Maple Leaf and Painreform 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 Painreform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Painreform.
Diversification Opportunities for Maple Leaf and Painreform
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maple and Painreform is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Green and Painreform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Painreform 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 Painreform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Painreform has no effect on the direction of Maple Leaf i.e., Maple Leaf and Painreform go up and down completely randomly.
Pair Corralation between Maple Leaf and Painreform
Assuming the 90 days horizon Maple Leaf Green is expected to generate 1.0 times more return on investment than Painreform. However, Maple Leaf Green is 1.0 times less risky than Painreform. It trades about 0.09 of its potential returns per unit of risk. Painreform is currently generating about 0.0 per unit of risk. If you would invest 2.40 in Maple Leaf Green on August 31, 2024 and sell it today you would earn a total of 0.80 from holding Maple Leaf Green or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Green vs. Painreform
Performance |
| Timeline |
| Maple Leaf Green |
| Painreform |
Maple Leaf and Painreform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Painreform
The main advantage of trading using opposite Maple Leaf and Painreform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Painreform 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 Painreform will offset losses from the drop in Painreform's long position.| Maple Leaf vs. Brainsway | Maple Leaf vs. Venus Concept | Maple Leaf vs. Tactile Systems Technology | Maple Leaf vs. Icecure Medical |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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