Correlation Between Northview Residential and Maple Leaf

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

By analyzing existing cross correlation between Northview Residential REIT and Maple Leaf Foods, you can compare the effects of market volatilities on Northview Residential and Maple Leaf 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 Northview Residential with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northview Residential and Maple Leaf.

Diversification Opportunities for Northview Residential and Maple Leaf

0.33

Correlation Coefficient

Northview Residential  Maple Leaf

Weak diversification

The 3 months correlation between Northview and Maple is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Northview Residential REIT and Maple Leaf Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Leaf Foods and Northview Residential 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 Northview Residential REIT are associated (or correlated) with Maple Leaf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Leaf Foods has no effect on the direction of Northview Residential i.e., Northview Residential and Maple Leaf go up and down completely randomly.

Pair Corralation between Northview Residential and Maple Leaf

Assuming the 90 days trading horizon Northview Residential REIT is expected to generate 0.9 times more return on investment than Maple Leaf. However, Northview Residential REIT is 1.11 times less risky than Maple Leaf. It trades about -0.05 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about -0.09 per unit of risk. If you would invest  1,523  in Northview Residential REIT on October 25, 2024 and sell it today you would lose (58.00) from holding Northview Residential REIT or give up 3.81% of portfolio value over 90 days.

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

Northview Residential REIT  vs.  Maple Leaf Foods

Northview Residential

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Northview Residential REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Maple Leaf Foods

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 1 (%) 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.

Pair Trading with Northview Residential and Maple Leaf

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

The idea behind Northview Residential REIT and Maple Leaf Foods 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.