Correlation Between Globex Mining and MTY Food
Can any of the company-specific risk be diversified away by investing in both Globex Mining 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 Globex Mining and MTY Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globex Mining Enterprises and MTY Food Group, you can compare the effects of market volatilities on Globex Mining 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 Globex Mining with a short position of MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globex Mining and MTY Food.
Diversification Opportunities for Globex Mining and MTY Food
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Globex and MTY is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Globex Mining Enterprises 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 Globex Mining 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 Globex Mining Enterprises 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 Globex Mining i.e., Globex Mining and MTY Food go up and down completely randomly.
Pair Corralation between Globex Mining and MTY Food
Assuming the 90 days trading horizon Globex Mining Enterprises is expected to generate 1.19 times more return on investment than MTY Food. However, Globex Mining is 1.19 times more volatile than MTY Food Group. It trades about 0.58 of its potential returns per unit of risk. MTY Food Group is currently generating about 0.23 per unit of risk. If you would invest 79.00 in Globex Mining Enterprises on November 5, 2024 and sell it today you would earn a total of 27.00 from holding Globex Mining Enterprises or generate 34.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globex Mining Enterprises vs. MTY Food Group
Performance |
| Timeline |
| Globex Mining Enterprises |
| MTY Food Group |
Globex Mining and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globex Mining and MTY Food
The main advantage of trading using opposite Globex Mining and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globex Mining 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.| Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc | Globex Mining vs. Apple Inc |
| MTY Food vs. Lamar Advertising | MTY Food vs. CarsalesCom | MTY Food vs. Monument Mining Limited | MTY Food vs. Eurasia Mining Plc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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