Correlation Between MK Restaurant and JD Food
Can any of the company-specific risk be diversified away by investing in both MK Restaurant and JD Food 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 JD Food 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 JD Food PCL, you can compare the effects of market volatilities on MK Restaurant and JD Food 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 JD Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of MK Restaurant and JD Food.
Diversification Opportunities for MK Restaurant and JD Food
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MK Restaurant and JDF is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MK Restaurant Group and JD Food PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JD Food PCL 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 JD Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JD Food PCL has no effect on the direction of MK Restaurant i.e., MK Restaurant and JD Food go up and down completely randomly.
Pair Corralation between MK Restaurant and JD Food
Given the investment horizon of 90 days MK Restaurant Group is expected to under-perform the JD Food. But the stock apears to be less risky and, when comparing its historical volatility, MK Restaurant Group is 1.37 times less risky than JD Food. The stock trades about -0.1 of its potential returns per unit of risk. The JD Food PCL is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 238.00 in JD Food PCL on September 12, 2024 and sell it today you would lose (32.00) from holding JD Food PCL or give up 13.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MK Restaurant Group vs. JD Food PCL
Performance |
| Timeline |
| MK Restaurant Group |
| JD Food PCL |
MK Restaurant and JD Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MK Restaurant and JD Food
The main advantage of trading using opposite MK Restaurant and JD Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MK Restaurant position performs unexpectedly, JD Food 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 JD Food will offset losses from the drop in JD Food's long position.| MK Restaurant vs. Hwa Fong Rubber | MK Restaurant vs. AAPICO Hitech Public | MK Restaurant vs. Haad Thip Public | MK Restaurant vs. Italian Thai Development Public |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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