Correlation Between Pentagon I and Maple Leaf

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Can any of the company-specific risk be diversified away by investing in both Pentagon I 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 Pentagon I and Maple Leaf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pentagon I Capital and Maple Leaf Foods, you can compare the effects of market volatilities on Pentagon I 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 Pentagon I with a short position of Maple Leaf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pentagon I and Maple Leaf.

Diversification Opportunities for Pentagon I and Maple Leaf

PentagonMapleDiversified AwayPentagonMapleDiversified Away100%
0.36
  Correlation Coefficient

Weak diversification

The 3 months correlation between Pentagon and Maple is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Pentagon I Capital 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 Pentagon I 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 Pentagon I Capital 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 Pentagon I i.e., Pentagon I and Maple Leaf go up and down completely randomly.

Pair Corralation between Pentagon I and Maple Leaf

If you would invest  2,156  in Maple Leaf Foods on November 30, 2024 and sell it today you would earn a total of  420.00  from holding Maple Leaf Foods or generate 19.48% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Pentagon I Capital  vs.  Maple Leaf Foods

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50-40-30-20-100
JavaScript chart by amCharts 3.21.15PNTI-P MFI
       Timeline  
Pentagon I Capital 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Pentagon I Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.030.0350.040.0450.050.0550.060.0650.07
Maple Leaf Foods 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Maple Leaf displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb20212223242526

Pentagon I and Maple Leaf Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-13.63-10.21-6.79-3.36-0.05182.956.069.1712.2815.39 0.020.040.060.08
JavaScript chart by amCharts 3.21.15PNTI-P MFI
       Returns  

Pair Trading with Pentagon I and Maple Leaf

The main advantage of trading using opposite Pentagon I and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pentagon I 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 Pentagon I Capital 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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