Correlation Between MTY Food and A W
Can any of the company-specific risk be diversified away by investing in both MTY Food and A W 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 A W 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 A W FOOD, you can compare the effects of market volatilities on MTY Food and A W 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 A W. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and A W.
Diversification Opportunities for MTY Food and A W
Modest diversification
The 3 months correlation between MTY and A W is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and A W FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A W FOOD 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 A W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A W FOOD has no effect on the direction of MTY Food i.e., MTY Food and A W go up and down completely randomly.
Pair Corralation between MTY Food and A W
Assuming the 90 days trading horizon MTY Food Group is expected to generate 0.94 times more return on investment than A W. However, MTY Food Group is 1.07 times less risky than A W. It trades about -0.02 of its potential returns per unit of risk. A W FOOD is currently generating about -0.14 per unit of risk. If you would invest 5,618 in MTY Food Group on August 31, 2024 and sell it today you would lose (843.00) from holding MTY Food Group or give up 15.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 8.31% |
| Values | Daily Returns |
MTY Food Group vs. A W FOOD
Performance |
| Timeline |
| MTY Food Group |
| A W FOOD |
MTY Food and A W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and A W
The main advantage of trading using opposite MTY Food and A W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, A W 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 A W will offset losses from the drop in A W's long position.| MTY Food vs. Berkshire Hathaway CDR | MTY Food vs. JPMorgan Chase Co | MTY Food vs. Bank of America | MTY Food vs. Alphabet Inc CDR |
| A W vs. Restaurant Brands International | A W vs. MTY Food Group | A W vs. Boston Pizza Royalties | A W vs. The Keg Royalties |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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