Correlation Between ÖKOWORLD and MTY Food

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

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

Diversification Opportunities for ÖKOWORLD and MTY Food

-0.61

Correlation Coefficient

ÖKOWORLD  MTY Food

Excellent diversification

The 3 months correlation between ÖKOWORLD and MTY is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding KOWORLD AG 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 ÖKOWORLD 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 KOWORLD AG 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 ÖKOWORLD i.e., ÖKOWORLD and MTY Food go up and down completely randomly.

Pair Corralation between ÖKOWORLD and MTY Food

Assuming the 90 days trading horizon KOWORLD AG is expected to generate 1.43 times more return on investment than MTY Food. However, ÖKOWORLD is 1.43 times more volatile than MTY Food Group. It trades about -0.01 of its potential returns per unit of risk. MTY Food Group is currently generating about -0.02 per unit of risk. If you would invest  3,649  in KOWORLD AG on October 11, 2024 and sell it today you would lose (729.00) from holding KOWORLD AG or give up 19.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

KOWORLD AG  vs.  MTY Food Group

KOWORLD AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KOWORLD AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ÖKOWORLD is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MTY Food Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MTY Food Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MTY Food is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ÖKOWORLD and MTY Food

The main advantage of trading using opposite ÖKOWORLD and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ÖKOWORLD 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 KOWORLD AG 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.