Correlation Between MTY Food and Mhlbauer Holding

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

Diversification Opportunities for MTY Food and Mhlbauer Holding

-0.32

Correlation Coefficient

MTY Food  Mhlbauer Holding

Very good diversification

The 3 months correlation between MTY and Mhlbauer is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Mhlbauer Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mhlbauer Holding 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 Mhlbauer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mhlbauer Holding has no effect on the direction of MTY Food i.e., MTY Food and Mhlbauer Holding go up and down completely randomly.

Pair Corralation between MTY Food and Mhlbauer Holding

Assuming the 90 days horizon MTY Food Group is expected to generate 0.94 times more return on investment than Mhlbauer Holding. However, MTY Food Group is 1.07 times less risky than Mhlbauer Holding. It trades about 0.11 of its potential returns per unit of risk. Mhlbauer Holding AG is currently generating about 0.04 per unit of risk. If you would invest  2,992  in MTY Food Group on October 25, 2024 and sell it today you would earn a total of  313.00  from holding MTY Food Group or generate 10.46% return on investment over 90 days.

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

MTY Food Group  vs.  Mhlbauer Holding AG

MTY Food Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MTY Food Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, MTY Food may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mhlbauer Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mhlbauer Holding AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Mhlbauer Holding is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MTY Food and Mhlbauer Holding

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

The idea behind MTY Food Group and Mhlbauer Holding AG 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.