Correlation Between Thai Vegetable and MK Restaurant
Can any of the company-specific risk be diversified away by investing in both Thai Vegetable 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 Thai Vegetable and MK Restaurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thai Vegetable Oil and MK Restaurant Group, you can compare the effects of market volatilities on Thai Vegetable 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 Thai Vegetable with a short position of MK Restaurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thai Vegetable and MK Restaurant.
Diversification Opportunities for Thai Vegetable and MK Restaurant
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thai and MK Restaurant is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thai Vegetable Oil 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 Thai Vegetable 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 Thai Vegetable Oil 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 Thai Vegetable i.e., Thai Vegetable and MK Restaurant go up and down completely randomly.
Pair Corralation between Thai Vegetable and MK Restaurant
Assuming the 90 days trading horizon Thai Vegetable Oil is expected to generate 0.78 times more return on investment than MK Restaurant. However, Thai Vegetable Oil is 1.28 times less risky than MK Restaurant. It trades about 0.04 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 2,161 in Thai Vegetable Oil on September 3, 2024 and sell it today you would earn a total of 129.00 from holding Thai Vegetable Oil or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thai Vegetable Oil vs. MK Restaurant Group
Performance |
| Timeline |
| Thai Vegetable Oil |
| MK Restaurant Group |
Thai Vegetable and MK Restaurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thai Vegetable and MK Restaurant
The main advantage of trading using opposite Thai Vegetable and MK Restaurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thai Vegetable 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.| Thai Vegetable vs. Charoen Pokphand Foods | Thai Vegetable vs. Thai Union Group | Thai Vegetable vs. TISCO Financial Group | Thai Vegetable vs. Thanachart Capital Public |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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