Correlation Between MTY Food and Guru Organic
Can any of the company-specific risk be diversified away by investing in both MTY Food and Guru Organic 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 Guru Organic 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 Guru Organic Energy, you can compare the effects of market volatilities on MTY Food and Guru Organic 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 Guru Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Guru Organic.
Diversification Opportunities for MTY Food and Guru Organic
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MTY and Guru is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Guru Organic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guru Organic Energy 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 Guru Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guru Organic Energy has no effect on the direction of MTY Food i.e., MTY Food and Guru Organic go up and down completely randomly.
Pair Corralation between MTY Food and Guru Organic
Assuming the 90 days trading horizon MTY Food is expected to generate 3.37 times less return on investment than Guru Organic. But when comparing it to its historical volatility, MTY Food Group is 2.52 times less risky than Guru Organic. It trades about 0.11 of its potential returns per unit of risk. Guru Organic Energy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Guru Organic Energy on August 29, 2024 and sell it today you would earn a total of 23.00 from holding Guru Organic Energy or generate 13.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTY Food Group vs. Guru Organic Energy
Performance |
| Timeline |
| MTY Food Group |
| Guru Organic Energy |
MTY Food and Guru Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and Guru Organic
The main advantage of trading using opposite MTY Food and Guru Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Guru Organic 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 Guru Organic will offset losses from the drop in Guru Organic's long position.| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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