Correlation Between MTY Food and Wenzhou Kangning
Can any of the company-specific risk be diversified away by investing in both MTY Food and Wenzhou Kangning 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 MTY Food and Wenzhou Kangning into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTY Food Group and Wenzhou Kangning Hospital, you can compare the effects of market volatilities on MTY Food and Wenzhou Kangning 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 MTY Food with a short position of Wenzhou Kangning. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Wenzhou Kangning.
Diversification Opportunities for MTY Food and Wenzhou Kangning
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MTY and Wenzhou is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Wenzhou Kangning Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wenzhou Kangning Hospital and MTY Food 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 MTY Food Group are associated (or correlated) with Wenzhou Kangning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wenzhou Kangning Hospital has no effect on the direction of MTY Food i.e., MTY Food and Wenzhou Kangning go up and down completely randomly.
Pair Corralation between MTY Food and Wenzhou Kangning
Assuming the 90 days horizon MTY Food Group is expected to generate 0.77 times more return on investment than Wenzhou Kangning. However, MTY Food Group is 1.29 times less risky than Wenzhou Kangning. It trades about -0.16 of its potential returns per unit of risk. Wenzhou Kangning Hospital is currently generating about -0.24 per unit of risk. If you would invest 3,230 in MTY Food Group on October 11, 2024 and sell it today you would lose (120.00) from holding MTY Food Group or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
MTY Food Group vs. Wenzhou Kangning Hospital
Performance |
| Timeline |
| MTY Food Group |
| Wenzhou Kangning Hospital |
MTY Food and Wenzhou Kangning Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and Wenzhou Kangning
The main advantage of trading using opposite MTY Food and Wenzhou Kangning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Wenzhou Kangning 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 Wenzhou Kangning will offset losses from the drop in Wenzhou Kangning's long position.| MTY Food vs. UNIQA INSURANCE GR | MTY Food vs. Cincinnati Financial Corp | MTY Food vs. ORMAT TECHNOLOGIES | MTY Food vs. SOFI TECHNOLOGIES |
| Wenzhou Kangning vs. WT OFFSHORE | Wenzhou Kangning vs. Richardson Electronics | Wenzhou Kangning vs. STORE ELECTRONIC | Wenzhou Kangning vs. Eidesvik Offshore ASA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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