Correlation Between Carabao Group and AP Public
Can any of the company-specific risk be diversified away by investing in both Carabao Group and AP 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 Carabao Group and AP Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carabao Group Public and AP Public, you can compare the effects of market volatilities on Carabao Group and AP 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 Carabao Group with a short position of AP Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and AP Public.
Diversification Opportunities for Carabao Group and AP Public
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carabao and AP Public is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and AP Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Public and Carabao Group 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 Carabao Group Public are associated (or correlated) with AP Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Public has no effect on the direction of Carabao Group i.e., Carabao Group and AP Public go up and down completely randomly.
Pair Corralation between Carabao Group and AP Public
Assuming the 90 days trading horizon Carabao Group Public is expected to generate 1.12 times more return on investment than AP Public. However, Carabao Group is 1.12 times more volatile than AP Public. It trades about 0.03 of its potential returns per unit of risk. AP Public is currently generating about -0.03 per unit of risk. 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 |
Carabao Group Public vs. AP Public
Performance |
| Timeline |
| Carabao Group Public |
| AP Public |
Carabao Group and AP Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carabao Group and AP Public
The main advantage of trading using opposite Carabao Group and AP Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, AP 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 AP Public will offset losses from the drop in AP Public's long position.| Carabao Group vs. CP ALL Public | Carabao Group vs. Minor International Public | Carabao Group vs. Srisawad Power 1979 | Carabao Group vs. Home Product Center |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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