Correlation Between MTY Food and Berkshire Hathaway

Can any of the company-specific risk be diversified away by investing in both MTY Food and Berkshire Hathaway 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 Berkshire Hathaway 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 Berkshire Hathaway, you can compare the effects of market volatilities on MTY Food and Berkshire Hathaway 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 Berkshire Hathaway. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Berkshire Hathaway.

Diversification Opportunities for MTY Food and Berkshire Hathaway

0.66

Correlation Coefficient

MTY Food  Berkshire Hathaway

Poor diversification

The 3 months correlation between MTY and Berkshire is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Berkshire Hathaway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkshire Hathaway 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 Berkshire Hathaway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkshire Hathaway has no effect on the direction of MTY Food i.e., MTY Food and Berkshire Hathaway go up and down completely randomly.

Pair Corralation between MTY Food and Berkshire Hathaway

Assuming the 90 days horizon MTY Food Group is expected to under-perform the Berkshire Hathaway. In addition to that, MTY Food is 1.88 times more volatile than Berkshire Hathaway. It trades about -0.08 of its total potential returns per unit of risk. Berkshire Hathaway is currently generating about -0.08 per unit of volatility. If you would invest  44,240  in Berkshire Hathaway on October 11, 2024 and sell it today you would lose (490.00) from holding Berkshire Hathaway or give up 1.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

MTY Food Group  vs.  Berkshire Hathaway

MTY Food Group

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MTY Food Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, MTY Food may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Berkshire Hathaway

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berkshire Hathaway are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Berkshire Hathaway is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MTY Food and Berkshire Hathaway

The main advantage of trading using opposite MTY Food and Berkshire Hathaway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Berkshire Hathaway 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 Berkshire Hathaway will offset losses from the drop in Berkshire Hathaway's long position.

The idea behind MTY Food Group and Berkshire Hathaway pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.