Correlation Between Carabao Group and Asia Sermkij
Can any of the company-specific risk be diversified away by investing in both Carabao Group and Asia Sermkij 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 Asia Sermkij 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 Asia Sermkij Leasing, you can compare the effects of market volatilities on Carabao Group and Asia Sermkij 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 Asia Sermkij. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and Asia Sermkij.
Diversification Opportunities for Carabao Group and Asia Sermkij
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carabao and Asia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and Asia Sermkij Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Sermkij Leasing 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 Asia Sermkij. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Sermkij Leasing has no effect on the direction of Carabao Group i.e., Carabao Group and Asia Sermkij go up and down completely randomly.
Pair Corralation between Carabao Group and Asia Sermkij
Assuming the 90 days trading horizon Carabao Group Public is expected to generate 1.06 times more return on investment than Asia Sermkij. However, Carabao Group is 1.06 times more volatile than Asia Sermkij Leasing. It trades about 0.02 of its potential returns per unit of risk. Asia Sermkij Leasing is currently generating about -0.32 per unit of risk. If you would invest 7,925 in Carabao Group Public on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Carabao Group Public or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carabao Group Public vs. Asia Sermkij Leasing
Performance |
| Timeline |
| Carabao Group Public |
| Asia Sermkij Leasing |
Carabao Group and Asia Sermkij Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carabao Group and Asia Sermkij
The main advantage of trading using opposite Carabao Group and Asia Sermkij positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, Asia Sermkij 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 Asia Sermkij will offset losses from the drop in Asia Sermkij's long position.The idea behind Carabao Group Public and Asia Sermkij Leasing pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Asia Sermkij vs. AP Public | Asia Sermkij vs. Kiatnakin Phatra Bank | Asia Sermkij vs. TISCO Financial Group | Asia Sermkij vs. Carabao Group 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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