Correlation Between Sabina Public and MK Restaurant
Can any of the company-specific risk be diversified away by investing in both Sabina Public 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 Sabina Public and MK Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabina Public and MK Restaurant Group, you can compare the effects of market volatilities on Sabina Public 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 Sabina Public with a short position of MK Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabina Public and MK Restaurant.
Diversification Opportunities for Sabina Public and MK Restaurant
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sabina and MK Restaurant is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Sabina 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 Sabina Public 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 Sabina 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 Sabina Public i.e., Sabina Public and MK Restaurant go up and down completely randomly.
Pair Corralation between Sabina Public and MK Restaurant
Assuming the 90 days trading horizon Sabina Public is expected to generate 0.77 times more return on investment than MK Restaurant. However, Sabina Public is 1.3 times less risky than MK Restaurant. It trades about -0.35 of its potential returns per unit of risk. MK Restaurant Group is currently generating about -0.61 per unit of risk. If you would invest 2,050 in Sabina Public on November 3, 2024 and sell it today you would lose (270.00) from holding Sabina Public or give up 13.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabina Public vs. MK Restaurant Group
Performance |
| Timeline |
| Sabina Public |
| MK Restaurant Group |
Sabina Public and MK Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabina Public and MK Restaurant
The main advantage of trading using opposite Sabina Public and MK Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabina Public 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.| Sabina Public vs. MK Restaurant Group | Sabina Public vs. Quality Houses Public | Sabina Public vs. SiS Distribution Public | Sabina Public vs. Ratchthani Leasing 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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