Correlation Between Focus Home and MTY Food
Can any of the company-specific risk be diversified away by investing in both Focus Home and MTY Food 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 Focus Home and MTY Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and MTY Food Group, you can compare the effects of market volatilities on Focus Home and MTY Food 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 Focus Home with a short position of MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and MTY Food.
Diversification Opportunities for Focus Home and MTY Food
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Focus and MTY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group and Focus Home 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 Focus Home Interactive are associated (or correlated) with MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of Focus Home i.e., Focus Home and MTY Food go up and down completely randomly.
Pair Corralation between Focus Home and MTY Food
Assuming the 90 days horizon Focus Home Interactive is expected to under-perform the MTY Food. In addition to that, Focus Home is 2.58 times more volatile than MTY Food Group. It trades about -0.02 of its total potential returns per unit of risk. MTY Food Group is currently generating about -0.02 per unit of volatility. If you would invest 4,189 in MTY Food Group on November 8, 2024 and sell it today you would lose (854.00) from holding MTY Food Group or give up 20.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. MTY Food Group
Performance |
| Timeline |
| Focus Home Interactive |
| MTY Food Group |
Focus Home and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and MTY Food
The main advantage of trading using opposite Focus Home and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, MTY Food 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 MTY Food will offset losses from the drop in MTY Food's long position.| Focus Home vs. Nintendo Co | Focus Home vs. Nintendo Co | Focus Home vs. Sea Limited | Focus Home vs. Electronic Arts |
| MTY Food vs. McDonalds | MTY Food vs. Starbucks | MTY Food vs. Starbucks | MTY Food vs. Chipotle Mexican Grill |
Check out your portfolio center.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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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