Correlation Between MTY Food and Enduro Metals

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

Diversification Opportunities for MTY Food and Enduro Metals

0.25

Correlation Coefficient

MTY Food  Enduro Metals

Modest diversification

The 3 months correlation between MTY and Enduro is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Enduro Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals Corp 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 Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals Corp has no effect on the direction of MTY Food i.e., MTY Food and Enduro Metals go up and down completely randomly.

Pair Corralation between MTY Food and Enduro Metals

Assuming the 90 days trading horizon MTY Food Group is expected to generate 0.45 times more return on investment than Enduro Metals. However, MTY Food Group is 2.23 times less risky than Enduro Metals. It trades about -0.05 of its potential returns per unit of risk. Enduro Metals Corp is currently generating about -0.03 per unit of risk. If you would invest  4,696  in MTY Food Group on December 20, 2024 and sell it today you would lose (420.00) from holding MTY Food Group or give up 8.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

MTY Food Group  vs.  Enduro Metals Corp

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 latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Enduro Metals Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enduro Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's fundamental indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with MTY Food and Enduro Metals

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

The idea behind MTY Food Group and Enduro Metals Corp 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.