Correlation Between Chumporn Palm and MK Restaurant
Can any of the company-specific risk be diversified away by investing in both Chumporn Palm 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 Chumporn Palm and MK Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chumporn Palm Oil and MK Restaurant Group, you can compare the effects of market volatilities on Chumporn Palm 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 Chumporn Palm with a short position of MK Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chumporn Palm and MK Restaurant.
Diversification Opportunities for Chumporn Palm and MK Restaurant
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chumporn and MK Restaurant is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Chumporn Palm Oil 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 Chumporn Palm 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 Chumporn Palm Oil 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 Chumporn Palm i.e., Chumporn Palm and MK Restaurant go up and down completely randomly.
Pair Corralation between Chumporn Palm and MK Restaurant
Assuming the 90 days trading horizon Chumporn Palm Oil is expected to under-perform the MK Restaurant. In addition to that, Chumporn Palm is 1.55 times more volatile than MK Restaurant Group. It trades about -0.21 of its total potential returns per unit of risk. MK Restaurant Group is currently generating about -0.31 per unit of volatility. If you would invest 2,750 in MK Restaurant Group on September 1, 2024 and sell it today you would lose (270.00) from holding MK Restaurant Group or give up 9.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chumporn Palm Oil vs. MK Restaurant Group
Performance |
| Timeline |
| Chumporn Palm Oil |
| MK Restaurant Group |
Chumporn Palm and MK Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chumporn Palm and MK Restaurant
The main advantage of trading using opposite Chumporn Palm and MK Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chumporn Palm 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.| Chumporn Palm vs. MK Restaurant Group | Chumporn Palm vs. TRC Construction Public | Chumporn Palm vs. Bangkok Expressway and | Chumporn Palm vs. Lohakit Metal Public |
| MK Restaurant vs. TRC Construction Public | MK Restaurant vs. Bangkok Expressway and | MK Restaurant vs. Lohakit Metal Public | MK Restaurant vs. Gunkul Engineering 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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