Correlation Between Microsoft CDR and MTY Food

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

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

Diversification Opportunities for Microsoft CDR and MTY Food

-0.28

Correlation Coefficient

Microsoft CDR  MTY Food

Very good diversification

The 3 months correlation between Microsoft and MTY is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft CDR 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 Microsoft CDR 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 Microsoft CDR 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 Microsoft CDR i.e., Microsoft CDR and MTY Food go up and down completely randomly.

Pair Corralation between Microsoft CDR and MTY Food

Assuming the 90 days trading horizon Microsoft CDR is expected to generate 0.67 times more return on investment than MTY Food. However, Microsoft CDR is 1.48 times less risky than MTY Food. It trades about 0.02 of its potential returns per unit of risk. MTY Food Group is currently generating about -0.15 per unit of risk. If you would invest  3,619  in Microsoft CDR on July 13, 2025 and sell it today you would earn a total of  41.00  from holding Microsoft CDR or generate 1.13% return on investment over 90 days.

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

Microsoft CDR  vs.  MTY Food Group

Microsoft CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft CDR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Microsoft CDR is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

MTY Food Group

Risk-Adjusted Performance

Weakest

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in November 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Microsoft CDR and MTY Food

The main advantage of trading using opposite Microsoft CDR and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft CDR 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 Microsoft CDR 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.