Correlation Between MTY Food and Nintendo
Can any of the company-specific risk be diversified away by investing in both MTY Food and Nintendo 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 Nintendo 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 Nintendo Co, you can compare the effects of market volatilities on MTY Food and Nintendo 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 Nintendo. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Nintendo.
Diversification Opportunities for MTY Food and Nintendo
Weak diversification
The 3 months correlation between MTY and Nintendo is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Nintendo Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nintendo 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 Nintendo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nintendo has no effect on the direction of MTY Food i.e., MTY Food and Nintendo go up and down completely randomly.
Pair Corralation between MTY Food and Nintendo
Assuming the 90 days horizon MTY Food Group is expected to generate 0.7 times more return on investment than Nintendo. However, MTY Food Group is 1.43 times less risky than Nintendo. It trades about 0.25 of its potential returns per unit of risk. Nintendo Co is currently generating about 0.09 per unit of risk. If you would invest 3,070 in MTY Food Group on October 25, 2024 and sell it today you would earn a total of 235.00 from holding MTY Food Group or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTY Food Group vs. Nintendo Co
Performance |
| Timeline |
| MTY Food Group |
| Nintendo |
MTY Food and Nintendo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and Nintendo
The main advantage of trading using opposite MTY Food and Nintendo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Nintendo 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 Nintendo will offset losses from the drop in Nintendo's long position.| MTY Food vs. McDonalds | MTY Food vs. Starbucks | MTY Food vs. Chipotle Mexican Grill | MTY Food vs. Compass Group PLC |
| Nintendo vs. Telecom Argentina SA | Nintendo vs. Methode Electronics | Nintendo vs. Chengdu PUTIAN Telecommunications | Nintendo vs. STORE ELECTRONIC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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