Correlation Between Carabao Group and Com7 PCL
Can any of the company-specific risk be diversified away by investing in both Carabao Group and Com7 PCL 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 Com7 PCL 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 Com7 PCL, you can compare the effects of market volatilities on Carabao Group and Com7 PCL 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 Com7 PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and Com7 PCL.
Diversification Opportunities for Carabao Group and Com7 PCL
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carabao and Com7 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and Com7 PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Com7 PCL 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 Com7 PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Com7 PCL has no effect on the direction of Carabao Group i.e., Carabao Group and Com7 PCL go up and down completely randomly.
Pair Corralation between Carabao Group and Com7 PCL
Assuming the 90 days trading horizon Carabao Group is expected to generate 19.19 times less return on investment than Com7 PCL. But when comparing it to its historical volatility, Carabao Group Public is 1.26 times less risky than Com7 PCL. It trades about 0.0 of its potential returns per unit of risk. Com7 PCL is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,160 in Com7 PCL on August 29, 2024 and sell it today you would earn a total of 540.00 from holding Com7 PCL or generate 25.0% 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. Com7 PCL
Performance |
| Timeline |
| Carabao Group Public |
| Com7 PCL |
Carabao Group and Com7 PCL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carabao Group and Com7 PCL
The main advantage of trading using opposite Carabao Group and Com7 PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, Com7 PCL 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 Com7 PCL will offset losses from the drop in Com7 PCL'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 |
| Com7 PCL vs. CP ALL Public | Com7 PCL vs. Home Product Center | Com7 PCL vs. Minor International Public | Com7 PCL vs. Bangkok Dusit Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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