Correlation Between Eddy Smart and MTY Food
Can any of the company-specific risk be diversified away by investing in both Eddy Smart 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 Eddy Smart and MTY Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eddy Smart Home and MTY Food Group, you can compare the effects of market volatilities on Eddy Smart 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 Eddy Smart with a short position of MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eddy Smart and MTY Food.
Diversification Opportunities for Eddy Smart and MTY Food
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eddy and MTY is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eddy Smart Home 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 Eddy Smart 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 Eddy Smart Home 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 Eddy Smart i.e., Eddy Smart and MTY Food go up and down completely randomly.
Pair Corralation between Eddy Smart and MTY Food
Assuming the 90 days horizon Eddy Smart Home is expected to generate 8.95 times more return on investment than MTY Food. However, Eddy Smart is 8.95 times more volatile than MTY Food Group. It trades about 0.16 of its potential returns per unit of risk. MTY Food Group is currently generating about -0.09 per unit of risk. If you would invest 230.00 in Eddy Smart Home on October 22, 2024 and sell it today you would earn a total of 60.00 from holding Eddy Smart Home or generate 26.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eddy Smart Home vs. MTY Food Group
Performance |
| Timeline |
| Eddy Smart Home |
| MTY Food Group |
Eddy Smart and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eddy Smart and MTY Food
The main advantage of trading using opposite Eddy Smart and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eddy Smart 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.| Eddy Smart vs. Simply Better Brands | Eddy Smart vs. Forward Water Technologies | Eddy Smart vs. Pulse Oil Corp | Eddy Smart vs. C3 Metals |
| MTY Food vs. Restaurant Brands International | MTY Food vs. Enghouse Systems | MTY Food vs. Metro Inc | MTY Food vs. BRP Inc |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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