Correlation Between Amazon CDR and Maple Leaf

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

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

Diversification Opportunities for Amazon CDR and Maple Leaf

-0.61

Correlation Coefficient

Amazon CDR  Maple Leaf

Excellent diversification

The 3 months correlation between Amazon and Maple is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Amazon CDR 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 Amazon CDR 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 Amazon CDR 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 Amazon CDR i.e., Amazon CDR and Maple Leaf go up and down completely randomly.

Pair Corralation between Amazon CDR and Maple Leaf

Assuming the 90 days trading horizon Amazon CDR is expected to generate 7.99 times less return on investment than Maple Leaf. In addition to that, Amazon CDR is 1.09 times more volatile than Maple Leaf Foods. It trades about 0.01 of its total potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.09 per unit of volatility. If you would invest  1,718  in Maple Leaf Foods on September 6, 2025 and sell it today you would earn a total of  803.00  from holding Maple Leaf Foods or generate 46.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Amazon CDR  vs.  Maple Leaf Foods

Amazon CDR

Risk-Adjusted Performance

Weakest

Over the last 90 days Amazon CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Amazon CDR is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Maple Leaf Foods

Risk-Adjusted Performance

Weakest

Over the last 90 days Maple Leaf Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Maple Leaf is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Amazon CDR and Maple Leaf

The main advantage of trading using opposite Amazon CDR and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon CDR 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 Amazon CDR 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.