Correlation Between MTY Food and Linamar

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

Diversification Opportunities for MTY Food and Linamar

-0.48

Correlation Coefficient

MTY Food  Linamar

Very good diversification

The 3 months correlation between MTY and Linamar is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar 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 Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of MTY Food i.e., MTY Food and Linamar go up and down completely randomly.

Pair Corralation between MTY Food and Linamar

Assuming the 90 days horizon MTY Food Group is expected to under-perform the Linamar. In addition to that, MTY Food is 1.8 times more volatile than Linamar. It trades about -0.04 of its total potential returns per unit of risk. Linamar is currently generating about 0.2 per unit of volatility. If you would invest  4,481  in Linamar on May 21, 2025 and sell it today you would earn a total of  806.00  from holding Linamar or generate 17.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

MTY Food Group  vs.  Linamar

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. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Linamar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Linamar are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Linamar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MTY Food and Linamar

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

The idea behind MTY Food Group and Linamar 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.