Correlation Between Maple Leaf and QC Copper
Can any of the company-specific risk be diversified away by investing in both Maple Leaf and QC Copper 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 Leaf and QC Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maple Leaf Foods and QC Copper and, you can compare the effects of market volatilities on Maple Leaf and QC Copper 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 Leaf with a short position of QC Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Leaf and QC Copper.
Diversification Opportunities for Maple Leaf and QC Copper
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maple and QCCU is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and QC Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QC Copper and Maple Leaf 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 Leaf Foods are associated (or correlated) with QC Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QC Copper has no effect on the direction of Maple Leaf i.e., Maple Leaf and QC Copper go up and down completely randomly.
Pair Corralation between Maple Leaf and QC Copper
Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.62 times more return on investment than QC Copper. However, Maple Leaf Foods is 1.63 times less risky than QC Copper. It trades about 0.24 of its potential returns per unit of risk. QC Copper and is currently generating about 0.02 per unit of risk. If you would invest 2,036 in Maple Leaf Foods on December 2, 2024 and sell it today you would earn a total of 510.00 from holding Maple Leaf Foods or generate 25.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 71.43% |
Values | Daily Returns |
Maple Leaf Foods vs. QC Copper and
Performance |
Timeline |
Maple Leaf Foods |
QC Copper |
Risk-Adjusted Performance
Weak
Weak | Strong |
Maple Leaf and QC Copper Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Maple Leaf and QC Copper
The main advantage of trading using opposite Maple Leaf and QC Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maple Leaf position performs unexpectedly, QC Copper 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 QC Copper will offset losses from the drop in QC Copper's long position.Maple Leaf vs. Saputo Inc | Maple Leaf vs. George Weston Limited | Maple Leaf vs. Empire Company Limited | Maple Leaf vs. Premium Brands Holdings |
QC Copper vs. Baselode Energy Corp | QC Copper vs. Surge Copper Corp | QC Copper vs. Marimaca Copper Corp | QC Copper vs. Kodiak Copper Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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