Correlation Between MK Restaurant and AJ Plast
Can any of the company-specific risk be diversified away by investing in both MK Restaurant and AJ Plast 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 MK Restaurant and AJ Plast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MK Restaurant Group and AJ Plast Public, you can compare the effects of market volatilities on MK Restaurant and AJ Plast 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 MK Restaurant with a short position of AJ Plast. Check out your portfolio center. Please also check ongoing floating volatility patterns of MK Restaurant and AJ Plast.
Diversification Opportunities for MK Restaurant and AJ Plast
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MK Restaurant and AJ Plast is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding MK Restaurant Group and AJ Plast Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Plast Public and MK Restaurant 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 MK Restaurant Group are associated (or correlated) with AJ Plast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Plast Public has no effect on the direction of MK Restaurant i.e., MK Restaurant and AJ Plast go up and down completely randomly.
Pair Corralation between MK Restaurant and AJ Plast
Given the investment horizon of 90 days MK Restaurant Group is expected to under-perform the AJ Plast. But the stock apears to be less risky and, when comparing its historical volatility, MK Restaurant Group is 30.05 times less risky than AJ Plast. The stock trades about -0.1 of its potential returns per unit of risk. The AJ Plast Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,227 in AJ Plast Public on September 2, 2024 and sell it today you would lose (747.00) from holding AJ Plast Public or give up 60.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MK Restaurant Group vs. AJ Plast Public
Performance |
| Timeline |
| MK Restaurant Group |
| AJ Plast Public |
MK Restaurant and AJ Plast Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MK Restaurant and AJ Plast
The main advantage of trading using opposite MK Restaurant and AJ Plast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MK Restaurant position performs unexpectedly, AJ Plast 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 AJ Plast will offset losses from the drop in AJ Plast's long position.| MK Restaurant vs. Minor International Public | MK Restaurant vs. Home Product Center | MK Restaurant vs. CP ALL Public | MK Restaurant vs. Central Pattana Public |
| AJ Plast vs. AAPICO Hitech Public | AJ Plast vs. AP Public | AJ Plast vs. Aikchol Hospital Public | AJ Plast vs. Bank of Ayudhya |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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