Correlation Between MTY Food and Capstone Mining

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

Diversification Opportunities for MTY Food and Capstone Mining

-0.36

Correlation Coefficient

MTY Food  Capstone Mining

Very good diversification

The 3 months correlation between MTY and Capstone is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Capstone Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Mining Corp 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 Capstone Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Mining Corp has no effect on the direction of MTY Food i.e., MTY Food and Capstone Mining go up and down completely randomly.

Pair Corralation between MTY Food and Capstone Mining

Assuming the 90 days trading horizon MTY Food Group is expected to under-perform the Capstone Mining. But the stock apears to be less risky and, when comparing its historical volatility, MTY Food Group is 1.3 times less risky than Capstone Mining. The stock trades about -0.04 of its potential returns per unit of risk. The Capstone Mining Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  740.00  in Capstone Mining Corp on May 27, 2025 and sell it today you would earn a total of  226.00  from holding Capstone Mining Corp or generate 30.54% 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.  Capstone Mining Corp

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 very healthy basic indicators, MTY Food is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Capstone Mining Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capstone Mining Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Capstone Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MTY Food and Capstone Mining

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

The idea behind MTY Food Group and Capstone Mining Corp 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.