Correlation Between Maple Leaf and Slate Grocery

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

Diversification Opportunities for Maple Leaf and Slate Grocery

0.49

Correlation Coefficient

Maple Leaf  Slate Grocery

Very weak diversification

The 3 months correlation between Maple and Slate is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of Maple Leaf i.e., Maple Leaf and Slate Grocery go up and down completely randomly.

Pair Corralation between Maple Leaf and Slate Grocery

Assuming the 90 days trading horizon Maple Leaf is expected to generate 1.3 times less return on investment than Slate Grocery. In addition to that, Maple Leaf is 1.16 times more volatile than Slate Grocery REIT. It trades about 0.05 of its total potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.07 per unit of volatility. If you would invest  981.00  in Slate Grocery REIT on September 12, 2024 and sell it today you would earn a total of  59.00  from holding Slate Grocery REIT or generate 6.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Maple Leaf Foods  vs.  Slate Grocery REIT

Maple Leaf Foods

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Maple Leaf is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Slate Grocery REIT

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with Maple Leaf and Slate Grocery

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

The idea behind Maple Leaf Foods and Slate Grocery REIT 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.