Correlation Between MK Restaurant and Bangkok Expressway
Can any of the company-specific risk be diversified away by investing in both MK Restaurant and Bangkok Expressway 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 Bangkok Expressway 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 Bangkok Expressway and, you can compare the effects of market volatilities on MK Restaurant and Bangkok Expressway 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 Bangkok Expressway. Check out your portfolio center. Please also check ongoing floating volatility patterns of MK Restaurant and Bangkok Expressway.
Diversification Opportunities for MK Restaurant and Bangkok Expressway
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MK Restaurant and Bangkok is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding MK Restaurant Group and Bangkok Expressway and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bangkok Expressway and 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 Bangkok Expressway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bangkok Expressway and has no effect on the direction of MK Restaurant i.e., MK Restaurant and Bangkok Expressway go up and down completely randomly.
Pair Corralation between MK Restaurant and Bangkok Expressway
Given the investment horizon of 90 days MK Restaurant Group is expected to under-perform the Bangkok Expressway. In addition to that, MK Restaurant is 1.15 times more volatile than Bangkok Expressway and. It trades about -0.1 of its total potential returns per unit of risk. Bangkok Expressway and is currently generating about -0.03 per unit of volatility. If you would invest 931.00 in Bangkok Expressway and on September 2, 2024 and sell it today you would lose (201.00) from holding Bangkok Expressway and or give up 21.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MK Restaurant Group vs. Bangkok Expressway and
Performance |
| Timeline |
| MK Restaurant Group |
| Bangkok Expressway and |
MK Restaurant and Bangkok Expressway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MK Restaurant and Bangkok Expressway
The main advantage of trading using opposite MK Restaurant and Bangkok Expressway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MK Restaurant position performs unexpectedly, Bangkok Expressway 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 Bangkok Expressway will offset losses from the drop in Bangkok Expressway'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 |
| Bangkok Expressway vs. BTS Group Holdings | Bangkok Expressway vs. Bangkok Dusit Medical | Bangkok Expressway vs. Airports of Thailand | Bangkok Expressway vs. CP ALL 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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