Correlation Between Maple Peak and Madison Pacific

Can any of the company-specific risk be diversified away by investing in both Maple Peak and Madison Pacific 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 Madison Pacific 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 Madison Pacific Properties, you can compare the effects of market volatilities on Maple Peak and Madison Pacific 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 Madison Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Peak and Madison Pacific.

Diversification Opportunities for Maple Peak and Madison Pacific

0.0

Correlation Coefficient

Maple Peak  Madison Pacific

Pay attention - limited upside

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

Pair Corralation between Maple Peak and Madison Pacific

If you would invest  400.00  in Madison Pacific Properties on September 13, 2024 and sell it today you would earn a total of  40.00  from holding Madison Pacific Properties or generate 10.0% return on investment over 90 days.

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

Maple Peak Investments  vs.  Madison Pacific Properties

Maple Peak Investments

Risk-Adjusted Performance

0 of 100

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.

Madison Pacific Prop

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Madison Pacific Properties are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Madison Pacific may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Maple Peak and Madison Pacific

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

The idea behind Maple Peak Investments and Madison Pacific Properties 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.