Correlation Between AP Public and Carabao Group
Can any of the company-specific risk be diversified away by investing in both AP Public and Carabao Group 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 AP Public and Carabao Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Public and Carabao Group Public, you can compare the effects of market volatilities on AP Public and Carabao Group 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 AP Public with a short position of Carabao Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Public and Carabao Group.
Diversification Opportunities for AP Public and Carabao Group
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AP Public and Carabao is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding AP Public and Carabao Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carabao Group Public and AP 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 AP Public are associated (or correlated) with Carabao Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carabao Group Public has no effect on the direction of AP Public i.e., AP Public and Carabao Group go up and down completely randomly.
Pair Corralation between AP Public and Carabao Group
Assuming the 90 days horizon AP Public is expected to under-perform the Carabao Group. But the stock apears to be less risky and, when comparing its historical volatility, AP Public is 1.12 times less risky than Carabao Group. The stock trades about -0.03 of its potential returns per unit of risk. The Carabao Group Public is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 7,382 in Carabao Group Public on August 29, 2024 and sell it today you would earn a total of 518.00 from holding Carabao Group Public or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Public vs. Carabao Group Public
Performance |
| Timeline |
| AP Public |
| Carabao Group Public |
AP Public and Carabao Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Public and Carabao Group
The main advantage of trading using opposite AP Public and Carabao Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Public position performs unexpectedly, Carabao Group 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 Carabao Group will offset losses from the drop in Carabao Group's long position.| AP Public vs. Land and Houses | AP Public vs. Quality Houses Public | AP Public vs. Bangkok Bank Public | AP Public vs. Siri Prime Office |
| Carabao Group vs. CP ALL Public | Carabao Group vs. Minor International Public | Carabao Group vs. Srisawad Power 1979 | Carabao Group vs. Home Product Center |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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