Correlation Between MK Restaurant and Sappe Public
Can any of the company-specific risk be diversified away by investing in both MK Restaurant and Sappe Public 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 Sappe Public 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 Sappe Public, you can compare the effects of market volatilities on MK Restaurant and Sappe Public 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 Sappe Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of MK Restaurant and Sappe Public.
Diversification Opportunities for MK Restaurant and Sappe Public
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MK Restaurant and Sappe is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding MK Restaurant Group and Sappe Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappe 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 Sappe Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappe Public has no effect on the direction of MK Restaurant i.e., MK Restaurant and Sappe Public go up and down completely randomly.
Pair Corralation between MK Restaurant and Sappe Public
Given the investment horizon of 90 days MK Restaurant Group is expected to under-perform the Sappe Public. In addition to that, MK Restaurant is 1.05 times more volatile than Sappe Public. It trades about -0.52 of its total potential returns per unit of risk. Sappe Public is currently generating about -0.24 per unit of volatility. If you would invest 6,700 in Sappe Public on October 24, 2024 and sell it today you would lose (700.00) from holding Sappe Public or give up 10.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
MK Restaurant Group vs. Sappe Public
Performance |
| Timeline |
| MK Restaurant Group |
| Sappe Public |
MK Restaurant and Sappe Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MK Restaurant and Sappe Public
The main advantage of trading using opposite MK Restaurant and Sappe Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MK Restaurant position performs unexpectedly, Sappe Public 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 Sappe Public will offset losses from the drop in Sappe Public'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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