Correlation Between Maple Leaf and Procaps Group
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and Procaps Group 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 Procaps Group 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 Procaps Group SA, you can compare the effects of market volatilities on Maple Leaf and Procaps Group 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 Procaps Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and Procaps Group.
Diversification Opportunities for Maple Leaf and Procaps Group
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Maple and Procaps is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Green and Procaps Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procaps Group SA 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 Procaps Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procaps Group SA has no effect on the direction of Maple Leaf i.e., Maple Leaf and Procaps Group go up and down completely randomly.
Pair Corralation between Maple Leaf and Procaps Group
Assuming the 90 days horizon Maple Leaf Green is expected to generate 2.46 times more return on investment than Procaps Group. However, Maple Leaf is 2.46 times more volatile than Procaps Group SA. It trades about 0.09 of its potential returns per unit of risk. Procaps Group SA 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maple Leaf Green vs. Procaps Group SA
Performance |
| Timeline |
| Maple Leaf Green |
| Procaps Group SA |
Maple Leaf and Procaps Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maple Leaf and Procaps Group
The main advantage of trading using opposite Maple Leaf and Procaps Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, Procaps Group 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 Procaps Group will offset losses from the drop in Procaps Group'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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