Correlation Between Reckitt Benckiser and Maple Leaf

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

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

Diversification Opportunities for Reckitt Benckiser and Maple Leaf

0.57

Correlation Coefficient

Reckitt Benckiser  Maple Leaf

Very weak diversification

The 3 months correlation between Reckitt and Maple is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Reckitt Benckiser Group 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 Reckitt Benckiser 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 Reckitt Benckiser Group 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 Reckitt Benckiser i.e., Reckitt Benckiser and Maple Leaf go up and down completely randomly.

Pair Corralation between Reckitt Benckiser and Maple Leaf

Assuming the 90 days horizon Reckitt Benckiser Group is expected to generate 1.26 times more return on investment than Maple Leaf. However, Reckitt Benckiser is 1.26 times more volatile than Maple Leaf Foods. It trades about 0.1 of its potential returns per unit of risk. Maple Leaf Foods is currently generating about 0.02 per unit of risk. If you would invest  6,692  in Reckitt Benckiser Group on July 9, 2025 and sell it today you would earn a total of  1,130  from holding Reckitt Benckiser Group or generate 16.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Reckitt Benckiser Group  vs.  Maple Leaf Foods

Reckitt Benckiser

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Reckitt Benckiser Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Reckitt Benckiser reported solid returns over the last few months and may actually be approaching a breakup point.

Maple Leaf Foods

Risk-Adjusted Performance

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. Despite nearly stable basic indicators, Maple Leaf is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Reckitt Benckiser and Maple Leaf

The main advantage of trading using opposite Reckitt Benckiser and Maple Leaf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reckitt Benckiser 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 Reckitt Benckiser Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.