Correlation Between MTY Food and Brookfield Office
Can any of the company-specific risk be diversified away by investing in both MTY Food and Brookfield Office 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 Brookfield Office 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 Brookfield Office Properties, you can compare the effects of market volatilities on MTY Food and Brookfield Office 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 Brookfield Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Brookfield Office.
Diversification Opportunities for MTY Food and Brookfield Office
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MTY and Brookfield is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Brookfield Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Office 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 Brookfield Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Office has no effect on the direction of MTY Food i.e., MTY Food and Brookfield Office go up and down completely randomly.
Pair Corralation between MTY Food and Brookfield Office
Assuming the 90 days trading horizon MTY Food Group is expected to generate 2.77 times more return on investment than Brookfield Office. However, MTY Food is 2.77 times more volatile than Brookfield Office Properties. It trades about 0.17 of its potential returns per unit of risk. Brookfield Office Properties is currently generating about 0.34 per unit of risk. If you would invest 4,735 in MTY Food Group on November 6, 2024 and sell it today you would earn a total of 312.00 from holding MTY Food Group or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTY Food Group vs. Brookfield Office Properties
Performance |
| Timeline |
| MTY Food Group |
| Brookfield Office |
MTY Food and Brookfield Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and Brookfield Office
The main advantage of trading using opposite MTY Food and Brookfield Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Brookfield Office 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 Brookfield Office will offset losses from the drop in Brookfield Office's long position.| MTY Food vs. Restaurant Brands International | MTY Food vs. Enghouse Systems | MTY Food vs. Metro Inc | MTY Food vs. BRP Inc |
| Brookfield Office vs. Northview Residential REIT | Brookfield Office vs. Wallbridge Mining | Brookfield Office vs. Auxly Cannabis Group | Brookfield Office vs. First Mining Gold |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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