Correlation Between VIP Entertainment and Maple Leaf
Can any of the company-specific risk be diversified away by investing in both VIP Entertainment 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 VIP Entertainment and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIP Entertainment Technologies and Maple Leaf Foods, you can compare the effects of market volatilities on VIP Entertainment 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 VIP Entertainment with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIP Entertainment and Maple Leaf.
Diversification Opportunities for VIP Entertainment and Maple Leaf
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VIP and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VIP Entertainment Technologies and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods and VIP Entertainment 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 VIP Entertainment Technologies 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 Foods has no effect on the direction of VIP Entertainment i.e., VIP Entertainment and Maple Leaf go up and down completely randomly.
Pair Corralation between VIP Entertainment and Maple Leaf
Assuming the 90 days horizon VIP Entertainment Technologies is expected to under-perform the Maple Leaf. In addition to that, VIP Entertainment is 5.58 times more volatile than Maple Leaf Foods. It trades about -0.03 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.01 per unit of volatility. If you would invest 2,266 in Maple Leaf Foods on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Maple Leaf Foods or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
VIP Entertainment Technologies vs. Maple Leaf Foods
Performance |
| Timeline |
| VIP Entertainment |
| Maple Leaf Foods |
VIP Entertainment and Maple Leaf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIP Entertainment and Maple Leaf
The main advantage of trading using opposite VIP Entertainment and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIP Entertainment 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.| VIP Entertainment vs. High Liner Foods | VIP Entertainment vs. Richelieu Hardware | VIP Entertainment vs. International Zeolite Corp | VIP Entertainment vs. European Residential Real |
| Maple Leaf vs. Saputo Inc | Maple Leaf vs. George Weston Limited | Maple Leaf vs. Empire Company Limited | Maple Leaf vs. Premium Brands Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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