Correlation Between Arbor Metals and Maple Peak

Can any of the company-specific risk be diversified away by investing in both Arbor Metals and Maple Peak 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 Arbor Metals and Maple Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arbor Metals Corp and Maple Peak Investments, you can compare the effects of market volatilities on Arbor Metals and Maple Peak 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 Arbor Metals with a short position of Maple Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Metals and Maple Peak.

Diversification Opportunities for Arbor Metals and Maple Peak

0.0

Correlation Coefficient

Arbor Metals  Maple Peak

Pay attention - limited upside

The 3 months correlation between Arbor and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Metals Corp and Maple Peak Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Peak Investments and Arbor Metals 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 Arbor Metals Corp are associated (or correlated) with Maple Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Peak Investments has no effect on the direction of Arbor Metals i.e., Arbor Metals and Maple Peak go up and down completely randomly.

Pair Corralation between Arbor Metals and Maple Peak

If you would invest  24.00  in Arbor Metals Corp on December 25, 2024 and sell it today you would earn a total of  12.00  from holding Arbor Metals Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Arbor Metals Corp  vs.  Maple Peak Investments

Arbor Metals Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arbor Metals Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Arbor Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Maple Peak Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maple Peak Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Maple Peak is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Arbor Metals and Maple Peak

The main advantage of trading using opposite Arbor Metals and Maple Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Metals position performs unexpectedly, Maple Peak 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 Peak will offset losses from the drop in Maple Peak's long position.

The idea behind Arbor Metals Corp and Maple Peak Investments pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.