Correlation Between Chiangmai Frozen and MK Restaurant
Can any of the company-specific risk be diversified away by investing in both Chiangmai Frozen and MK Restaurant 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 Chiangmai Frozen and MK Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chiangmai Frozen Foods and MK Restaurant Group, you can compare the effects of market volatilities on Chiangmai Frozen and MK Restaurant 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 Chiangmai Frozen with a short position of MK Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chiangmai Frozen and MK Restaurant.
Diversification Opportunities for Chiangmai Frozen and MK Restaurant
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chiangmai and MK Restaurant is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Chiangmai Frozen Foods and MK Restaurant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MK Restaurant Group and Chiangmai Frozen 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 Chiangmai Frozen Foods are associated (or correlated) with MK Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MK Restaurant Group has no effect on the direction of Chiangmai Frozen i.e., Chiangmai Frozen and MK Restaurant go up and down completely randomly.
Pair Corralation between Chiangmai Frozen and MK Restaurant
Assuming the 90 days horizon Chiangmai Frozen Foods is expected to generate 74.31 times more return on investment than MK Restaurant. However, Chiangmai Frozen is 74.31 times more volatile than MK Restaurant Group. It trades about 0.11 of its potential returns per unit of risk. MK Restaurant Group is currently generating about -0.04 per unit of risk. If you would invest 230.00 in Chiangmai Frozen Foods on September 2, 2024 and sell it today you would lose (28.00) from holding Chiangmai Frozen Foods or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chiangmai Frozen Foods vs. MK Restaurant Group
Performance |
| Timeline |
| Chiangmai Frozen Foods |
| MK Restaurant Group |
Chiangmai Frozen and MK Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chiangmai Frozen and MK Restaurant
The main advantage of trading using opposite Chiangmai Frozen and MK Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chiangmai Frozen position performs unexpectedly, MK Restaurant 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 MK Restaurant will offset losses from the drop in MK Restaurant's long position.| Chiangmai Frozen vs. MK Restaurant Group | Chiangmai Frozen vs. TRC Construction Public | Chiangmai Frozen vs. Bangkok Expressway and | Chiangmai Frozen vs. Lohakit Metal Public |
| MK Restaurant vs. Minor International Public | MK Restaurant vs. Home Product Center | MK Restaurant vs. CP ALL Public | MK Restaurant vs. Central Pattana Public |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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