Correlation Between MK Restaurant and Chiangmai Frozen
Can any of the company-specific risk be diversified away by investing in both MK Restaurant and Chiangmai Frozen 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 Chiangmai Frozen 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 Chiangmai Frozen Foods, you can compare the effects of market volatilities on MK Restaurant and Chiangmai Frozen 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 Chiangmai Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MK Restaurant and Chiangmai Frozen.
Diversification Opportunities for MK Restaurant and Chiangmai Frozen
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MK Restaurant and Chiangmai is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MK Restaurant Group and Chiangmai Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chiangmai Frozen Foods 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 Chiangmai Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chiangmai Frozen Foods has no effect on the direction of MK Restaurant i.e., MK Restaurant and Chiangmai Frozen go up and down completely randomly.
Pair Corralation between MK Restaurant and Chiangmai Frozen
Given the investment horizon of 90 days MK Restaurant Group is expected to under-perform the Chiangmai Frozen. But the stock apears to be less risky and, when comparing its historical volatility, MK Restaurant Group is 74.31 times less risky than Chiangmai Frozen. The stock trades about -0.04 of its potential returns per unit of risk. The Chiangmai Frozen Foods is currently generating about 0.11 of returns per unit of risk over similar time horizon. 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 |
MK Restaurant Group vs. Chiangmai Frozen Foods
Performance |
| Timeline |
| MK Restaurant Group |
| Chiangmai Frozen Foods |
MK Restaurant and Chiangmai Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MK Restaurant and Chiangmai Frozen
The main advantage of trading using opposite MK Restaurant and Chiangmai Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MK Restaurant position performs unexpectedly, Chiangmai Frozen 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 Chiangmai Frozen will offset losses from the drop in Chiangmai Frozen'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 |
| Chiangmai Frozen vs. MK Restaurant Group | Chiangmai Frozen vs. TRC Construction Public | Chiangmai Frozen vs. Bangkok Expressway and | Chiangmai Frozen vs. Lohakit Metal 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 CEOs Directory module to screen CEOs from public companies around the world.
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