Correlation Between Goeasy and MTY Food
Can any of the company-specific risk be diversified away by investing in both Goeasy 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 Goeasy and MTY Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between goeasy and MTY Food Group, you can compare the effects of market volatilities on Goeasy 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 Goeasy with a short position of MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goeasy and MTY Food.
Diversification Opportunities for Goeasy and MTY Food
Good diversification
The 3 months correlation between Goeasy and MTY is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding goeasy 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 Goeasy 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 goeasy 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 Goeasy i.e., Goeasy and MTY Food go up and down completely randomly.
Pair Corralation between Goeasy and MTY Food
Assuming the 90 days trading horizon goeasy is expected to under-perform the MTY Food. But the stock apears to be less risky and, when comparing its historical volatility, goeasy is 1.26 times less risky than MTY Food. The stock trades about -0.03 of its potential returns per unit of risk. The MTY Food Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,536 in MTY Food Group on August 28, 2024 and sell it today you would earn a total of 202.00 from holding MTY Food Group or generate 4.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
goeasy vs. MTY Food Group
Performance |
| Timeline |
| goeasy |
| MTY Food Group |
Goeasy and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goeasy and MTY Food
The main advantage of trading using opposite Goeasy and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goeasy 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.| Goeasy vs. TUT Fitness Group | Goeasy vs. Lion One Metals | Goeasy vs. Reliq Health Technologies | Goeasy vs. Bausch Health Companies |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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