Correlation Between NYSE Composite and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Maple Leaf 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 NYSE Composite and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Maple Leaf Green, you can compare the effects of market volatilities on NYSE Composite and Maple Leaf 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 NYSE Composite with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Maple Leaf.
Diversification Opportunities for NYSE Composite and Maple Leaf
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and Maple is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Maple Leaf Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Green and NYSE Composite 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 NYSE Composite are associated (or correlated) with Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Green has no effect on the direction of NYSE Composite i.e., NYSE Composite and Maple Leaf go up and down completely randomly.
Pair Corralation between NYSE Composite and Maple Leaf
Assuming the 90 days trading horizon NYSE Composite is expected to generate 15.22 times less return on investment than Maple Leaf. But when comparing it to its historical volatility, NYSE Composite is 22.11 times less risky than Maple Leaf. It trades about 0.09 of its potential returns per unit of risk. Maple Leaf Green is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3.00 in Maple Leaf Green on November 2, 2024 and sell it today you would lose (0.50) from holding Maple Leaf Green or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Maple Leaf Green
Performance |
| Timeline |
NYSE Composite and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Maple Leaf Green
Pair trading matchups for Maple Leaf
Pair Trading with NYSE Composite and Maple Leaf
The main advantage of trading using opposite NYSE Composite and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Maple Leaf 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 Maple Leaf will offset losses from the drop in Maple Leaf's long position.| NYSE Composite vs. Western Copper and | NYSE Composite vs. Chemours Co | NYSE Composite vs. IPG Photonics | NYSE Composite vs. Morgan Advanced Materials |
| Maple Leaf vs. Greater Cannabis | Maple Leaf vs. Global Hemp Group | Maple Leaf vs. Cannabis Suisse Corp | Maple Leaf vs. Mc Endvrs |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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