Correlation Between TECSYS and MTY Food

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

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

Diversification Opportunities for TECSYS and MTY Food

0.61

Correlation Coefficient

TECSYS  MTY Food

Poor diversification

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

Pair Corralation between TECSYS and MTY Food

Assuming the 90 days trading horizon TECSYS Inc is expected to generate 1.03 times more return on investment than MTY Food. However, TECSYS is 1.03 times more volatile than MTY Food Group. It trades about 0.12 of its potential returns per unit of risk. MTY Food Group is currently generating about 0.07 per unit of risk. If you would invest  4,108  in TECSYS Inc on September 25, 2024 and sell it today you would earn a total of  464.00  from holding TECSYS Inc or generate 11.3% return on investment over 90 days.

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

TECSYS Inc  vs.  MTY Food Group

TECSYS Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TECSYS Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TECSYS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MTY Food Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MTY Food Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, MTY Food may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TECSYS and MTY Food

The main advantage of trading using opposite TECSYS and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TECSYS 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 TECSYS Inc 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.