Correlation Between Khonburi Sugar and MK Restaurant
Can any of the company-specific risk be diversified away by investing in both Khonburi Sugar 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 Khonburi Sugar and MK Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khonburi Sugar Public and MK Restaurant Group, you can compare the effects of market volatilities on Khonburi Sugar 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 Khonburi Sugar with a short position of MK Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khonburi Sugar and MK Restaurant.
Diversification Opportunities for Khonburi Sugar and MK Restaurant
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Khonburi and MK Restaurant is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Khonburi Sugar Public 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 Khonburi Sugar 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 Khonburi Sugar Public 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 Khonburi Sugar i.e., Khonburi Sugar and MK Restaurant go up and down completely randomly.
Pair Corralation between Khonburi Sugar and MK Restaurant
Assuming the 90 days trading horizon Khonburi Sugar Public is expected to generate 33.52 times more return on investment than MK Restaurant. However, Khonburi Sugar is 33.52 times more volatile than MK Restaurant Group. It trades about 0.05 of its potential returns per unit of risk. MK Restaurant Group is currently generating about -0.09 per unit of risk. If you would invest 628.00 in Khonburi Sugar Public on August 28, 2024 and sell it today you would lose (38.00) from holding Khonburi Sugar Public or give up 6.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Khonburi Sugar Public vs. MK Restaurant Group
Performance |
| Timeline |
| Khonburi Sugar Public |
| MK Restaurant Group |
Khonburi Sugar and MK Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khonburi Sugar and MK Restaurant
The main advantage of trading using opposite Khonburi Sugar and MK Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khonburi Sugar 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.| Khonburi Sugar vs. Khon Kaen Sugar | Khonburi Sugar vs. Kaset Thai International | Khonburi Sugar vs. Lam Soon Public | Khonburi Sugar vs. Lee Feed Mill |
| MK Restaurant vs. SCB X Public | MK Restaurant vs. Kasikornbank Public | MK Restaurant vs. PTT Public | MK Restaurant vs. Kasikornbank 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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