Correlation Between Maple Leaf and Carespan Health

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

Diversification Opportunities for Maple Leaf and Carespan Health

0.0

Correlation Coefficient

Maple Leaf  Carespan Health

Pay attention - limited upside

The 3 months correlation between Maple and Carespan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maple Leaf Foods and Carespan Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carespan Health 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 Carespan Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carespan Health has no effect on the direction of Maple Leaf i.e., Maple Leaf and Carespan Health go up and down completely randomly.

Pair Corralation between Maple Leaf and Carespan Health

If you would invest  2,445  in Maple Leaf Foods on April 25, 2025 and sell it today you would earn a total of  548.00  from holding Maple Leaf Foods or generate 22.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Maple Leaf Foods  vs.  Carespan Health

Maple Leaf Foods

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Maple Leaf Foods are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Maple Leaf displayed solid returns over the last few months and may actually be approaching a breakup point.

Carespan Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carespan Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Carespan Health is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Maple Leaf and Carespan Health

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

The idea behind Maple Leaf Foods and Carespan Health 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.