Correlation Between Minor International and MK Restaurant
Can any of the company-specific risk be diversified away by investing in both Minor International and MK Restaurant 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 Minor International and MK Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Minor International Public and MK Restaurant Group, you can compare the effects of market volatilities on Minor International and MK Restaurant 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 Minor International with a short position of MK Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Minor International and MK Restaurant.
Diversification Opportunities for Minor International and MK Restaurant
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Minor and MK Restaurant is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Minor International Public and MK Restaurant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MK Restaurant Group and Minor International 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 Minor International Public are associated (or correlated) with MK Restaurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MK Restaurant Group has no effect on the direction of Minor International i.e., Minor International and MK Restaurant go up and down completely randomly.
Pair Corralation between Minor International and MK Restaurant
Assuming the 90 days trading horizon Minor International Public is expected to generate 0.98 times more return on investment than MK Restaurant. However, Minor International Public is 1.02 times less risky than MK Restaurant. It trades about -0.06 of its potential returns per unit of risk. MK Restaurant Group is currently generating about -0.1 per unit of risk. If you would invest 3,071 in Minor International Public on September 3, 2024 and sell it today you would lose (396.00) from holding Minor International Public or give up 12.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Minor International Public vs. MK Restaurant Group
Performance |
| Timeline |
| Minor International |
| MK Restaurant Group |
Minor International and MK Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Minor International and MK Restaurant
The main advantage of trading using opposite Minor International and MK Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Minor International position performs unexpectedly, MK Restaurant 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 MK Restaurant will offset losses from the drop in MK Restaurant's long position.| Minor International vs. Central Pattana Public | Minor International vs. CP ALL Public | Minor International vs. Bangkok Dusit Medical | Minor International vs. Airports of Thailand |
| MK Restaurant vs. Minor International Public | MK Restaurant vs. Home Product Center | MK Restaurant vs. CP ALL Public | MK Restaurant vs. Central Pattana 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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