Correlation Between Maple Leaf and CORNISH METALS

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

Diversification Opportunities for Maple Leaf and CORNISH METALS

0.68

Correlation Coefficient

Maple Leaf  CORNISH METALS

Poor diversification

The 3 months correlation between Maple and CORNISH is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and CORNISH METALS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNISH METALS INC 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 CORNISH METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNISH METALS INC has no effect on the direction of Maple Leaf i.e., Maple Leaf and CORNISH METALS go up and down completely randomly.

Pair Corralation between Maple Leaf and CORNISH METALS

Assuming the 90 days trading horizon Maple Leaf Foods is expected to generate 0.49 times more return on investment than CORNISH METALS. However, Maple Leaf Foods is 2.04 times less risky than CORNISH METALS. It trades about 0.2 of its potential returns per unit of risk. CORNISH METALS INC is currently generating about 0.08 per unit of risk. If you would invest  1,556  in Maple Leaf Foods on April 24, 2025 and sell it today you would earn a total of  334.00  from holding Maple Leaf Foods or generate 21.47% return on investment over 90 days.

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

Maple Leaf Foods  vs.  CORNISH METALS INC

Maple Leaf Foods

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Maple Leaf unveiled solid returns over the last few months and may actually be approaching a breakup point.

CORNISH METALS INC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CORNISH METALS INC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, CORNISH METALS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maple Leaf and CORNISH METALS

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

The idea behind Maple Leaf Foods and CORNISH METALS INC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.