Correlation Between MTY Food and Sotherly Hotels
Can any of the company-specific risk be diversified away by investing in both MTY Food and Sotherly Hotels 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 Sotherly Hotels 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 Sotherly Hotels, you can compare the effects of market volatilities on MTY Food and Sotherly Hotels 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 Sotherly Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and Sotherly Hotels.
Diversification Opportunities for MTY Food and Sotherly Hotels
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MTY and Sotherly is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Sotherly Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sotherly Hotels 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 Sotherly Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sotherly Hotels has no effect on the direction of MTY Food i.e., MTY Food and Sotherly Hotels go up and down completely randomly.
Pair Corralation between MTY Food and Sotherly Hotels
Assuming the 90 days horizon MTY Food Group is expected to under-perform the Sotherly Hotels. But the stock apears to be less risky and, when comparing its historical volatility, MTY Food Group is 1.74 times less risky than Sotherly Hotels. The stock trades about 0.0 of its potential returns per unit of risk. The Sotherly Hotels is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 60.00 in Sotherly Hotels on April 20, 2025 and sell it today you would earn a total of 13.00 from holding Sotherly Hotels or generate 21.67% 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. Sotherly Hotels
Performance |
Timeline |
MTY Food Group |
Sotherly Hotels |
MTY Food and Sotherly Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MTY Food and Sotherly Hotels
The main advantage of trading using opposite MTY Food and Sotherly Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food position performs unexpectedly, Sotherly Hotels 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 Sotherly Hotels will offset losses from the drop in Sotherly Hotels' long position.MTY Food vs. Darden Restaurants | MTY Food vs. AUREA SA INH | MTY Food vs. SIVERS SEMICONDUCTORS AB | MTY Food vs. INTUITIVE SURGICAL |
Sotherly Hotels vs. COVIVIO HOTELS INH | Sotherly Hotels vs. DEVRY EDUCATION GRP | Sotherly Hotels vs. Pebblebrook Hotel Trust | Sotherly Hotels vs. Xinhua Winshare Publishing |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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