Correlation Between MK Restaurant and Royal Plus
Can any of the company-specific risk be diversified away by investing in both MK Restaurant and Royal Plus 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 Royal Plus 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 Royal Plus PCL, you can compare the effects of market volatilities on MK Restaurant and Royal Plus 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 Royal Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of MK Restaurant and Royal Plus.
Diversification Opportunities for MK Restaurant and Royal Plus
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MK Restaurant and Royal is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MK Restaurant Group and Royal Plus PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Plus 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 Royal Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Plus PCL has no effect on the direction of MK Restaurant i.e., MK Restaurant and Royal Plus go up and down completely randomly.
Pair Corralation between MK Restaurant and Royal Plus
Given the investment horizon of 90 days MK Restaurant Group is expected to generate 1.04 times more return on investment than Royal Plus. However, MK Restaurant is 1.04 times more volatile than Royal Plus PCL. It trades about -0.05 of its potential returns per unit of risk. Royal Plus PCL is currently generating about -0.15 per unit of risk. If you would invest 2,625 in MK Restaurant Group on September 13, 2024 and sell it today you would lose (50.00) from holding MK Restaurant Group or give up 1.9% 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. Royal Plus PCL
Performance |
| Timeline |
| MK Restaurant Group |
| Royal Plus PCL |
MK Restaurant and Royal Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MK Restaurant and Royal Plus
The main advantage of trading using opposite MK Restaurant and Royal Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MK Restaurant position performs unexpectedly, Royal Plus 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 Royal Plus will offset losses from the drop in Royal Plus' 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 |
| Royal Plus vs. Delta Electronics Public | Royal Plus vs. Delta Electronics Public | Royal Plus vs. Airports of Thailand | Royal Plus vs. Airports of Thailand |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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