Correlation Between MTY Food and ACT Energy

Can any of the company-specific risk be diversified away by investing in both MTY Food and ACT Energy 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 ACT Energy 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 ACT Energy Technologies, you can compare the effects of market volatilities on MTY Food and ACT Energy 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 ACT Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and ACT Energy.

Diversification Opportunities for MTY Food and ACT Energy

0.16

Correlation Coefficient

MTY Food  ACT Energy

Average diversification

The 3 months correlation between MTY and ACT is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and ACT Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACT Energy Technologies 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 ACT Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACT Energy Technologies has no effect on the direction of MTY Food i.e., MTY Food and ACT Energy go up and down completely randomly.

Pair Corralation between MTY Food and ACT Energy

Assuming the 90 days trading horizon MTY Food Group is expected to under-perform the ACT Energy. In addition to that, MTY Food is 1.29 times more volatile than ACT Energy Technologies. It trades about -0.12 of its total potential returns per unit of risk. ACT Energy Technologies is currently generating about -0.06 per unit of volatility. If you would invest  493.00  in ACT Energy Technologies on May 11, 2025 and sell it today you would lose (35.00) from holding ACT Energy Technologies or give up 7.1% of portfolio value over 90 days.

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

MTY Food Group  vs.  ACT Energy Technologies

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 September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ACT Energy Technologies

Risk-Adjusted Performance

Weakest

Over the last 90 days ACT Energy Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with MTY Food and ACT Energy

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

The idea behind MTY Food Group and ACT Energy Technologies 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.