Correlation Between Apple and MTY Food

Can any of the company-specific risk be diversified away by investing in both Apple and MTY Food 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 Apple and MTY Food into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apple Inc CDR and MTY Food Group, you can compare the effects of market volatilities on Apple and MTY Food 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 Apple with a short position of MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and MTY Food.

Diversification Opportunities for Apple and MTY Food

0.15

Correlation Coefficient

Apple  MTY Food

Average diversification

The 3 months correlation between Apple and MTY is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group and Apple 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 Apple Inc CDR are associated (or correlated) with MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of Apple i.e., Apple and MTY Food go up and down completely randomly.

Pair Corralation between Apple and MTY Food

Assuming the 90 days trading horizon Apple Inc CDR is expected to under-perform the MTY Food. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc CDR is 1.38 times less risky than MTY Food. The stock trades about -0.13 of its potential returns per unit of risk. The MTY Food Group is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  4,536  in MTY Food Group on December 28, 2024 and sell it today you would lose (308.00) from holding MTY Food Group or give up 6.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Apple Inc CDR  vs.  MTY Food Group

Apple Inc CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Apple Inc CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MTY Food Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days MTY Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, MTY Food is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Apple and MTY Food

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

The idea behind Apple Inc CDR and MTY Food Group 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.

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