Correlation Between Maple Peak and Algoma Steel

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

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

Diversification Opportunities for Maple Peak and Algoma Steel

0.0

Correlation Coefficient

Maple Peak  Algoma Steel

Pay attention - limited upside

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

Pair Corralation between Maple Peak and Algoma Steel

Assuming the 90 days horizon Maple Peak Investments is expected to under-perform the Algoma Steel. In addition to that, Maple Peak is 2.01 times more volatile than Algoma Steel Group. It trades about -0.07 of its total potential returns per unit of risk. Algoma Steel Group is currently generating about 0.01 per unit of volatility. If you would invest  1,075  in Algoma Steel Group on December 2, 2024 and sell it today you would lose (15.00) from holding Algoma Steel Group or give up 1.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Maple Peak Investments  vs.  Algoma Steel Group

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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Algoma Steel Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Algoma Steel Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Maple Peak and Algoma Steel

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

The idea behind Maple Peak Investments and Algoma Steel Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.