Correlation Between Food Moments and MFC Asset

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

By analyzing existing cross correlation between Food Moments PCL and MFC Asset Management, you can compare the effects of market volatilities on Food Moments and MFC Asset 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 Food Moments with a short position of MFC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Moments and MFC Asset.

Diversification Opportunities for Food Moments and MFC Asset

0.26

Correlation Coefficient

Food Moments  MFC Asset

Modest diversification

The 3 months correlation between Food and MFC is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Food Moments PCL and MFC Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFC Asset Management and Food Moments 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 Food Moments PCL are associated (or correlated) with MFC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFC Asset Management has no effect on the direction of Food Moments i.e., Food Moments and MFC Asset go up and down completely randomly.

Pair Corralation between Food Moments and MFC Asset

Assuming the 90 days horizon Food Moments is expected to generate 2.11 times less return on investment than MFC Asset. But when comparing it to its historical volatility, Food Moments PCL is 1.29 times less risky than MFC Asset. It trades about 0.05 of its potential returns per unit of risk. MFC Asset Management is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,452  in MFC Asset Management on April 22, 2025 and sell it today you would earn a total of  323.00  from holding MFC Asset Management or generate 13.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Food Moments PCL  vs.  MFC Asset Management

Food Moments PCL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Food Moments PCL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Food Moments may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MFC Asset Management

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MFC Asset Management are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, MFC Asset disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Food Moments and MFC Asset

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

The idea behind Food Moments PCL and MFC Asset Management 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .