Correlation Between MTY Food and Amazon CDR
Can any of the company-specific risk be diversified away by investing in both MTY Food and Amazon CDR 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 Amazon CDR 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 Amazon CDR, you can compare the effects of market volatilities on MTY Food and Amazon CDR 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 Amazon CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Amazon CDR.
Diversification Opportunities for MTY Food and Amazon CDR
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MTY and Amazon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Amazon CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon CDR 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 Amazon CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon CDR has no effect on the direction of MTY Food i.e., MTY Food and Amazon CDR go up and down completely randomly.
Pair Corralation between MTY Food and Amazon CDR
Assuming the 90 days trading horizon MTY Food Group is expected to under-perform the Amazon CDR. But the stock apears to be less risky and, when comparing its historical volatility, MTY Food Group is 1.12 times less risky than Amazon CDR. The stock trades about -0.01 of its potential returns per unit of risk. The Amazon CDR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,003 in Amazon CDR on September 16, 2024 and sell it today you would earn a total of 1,706 from holding Amazon CDR or generate 170.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTY Food Group vs. Amazon CDR
Performance |
| Timeline |
| MTY Food Group |
| Amazon CDR |
MTY Food and Amazon CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and Amazon CDR
The main advantage of trading using opposite MTY Food and Amazon CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Amazon CDR 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 Amazon CDR will offset losses from the drop in Amazon CDR's long position.| MTY Food vs. Berkshire Hathaway CDR | MTY Food vs. Microsoft Corp CDR | MTY Food vs. Apple Inc CDR | MTY Food vs. Alphabet Inc CDR |
| Amazon CDR vs. MTY Food Group | Amazon CDR vs. A W FOOD | Amazon CDR vs. Firan Technology Group | Amazon CDR vs. Calian Technologies |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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