Correlation Between Carabao Group and Haad Thip
Can any of the company-specific risk be diversified away by investing in both Carabao Group and Haad Thip 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 Haad Thip 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 Haad Thip Public, you can compare the effects of market volatilities on Carabao Group and Haad Thip 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 Haad Thip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and Haad Thip.
Diversification Opportunities for Carabao Group and Haad Thip
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carabao and Haad is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and Haad Thip Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haad Thip 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 Haad Thip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haad Thip Public has no effect on the direction of Carabao Group i.e., Carabao Group and Haad Thip go up and down completely randomly.
Pair Corralation between Carabao Group and Haad Thip
Assuming the 90 days trading horizon Carabao Group Public is expected to generate 1.52 times more return on investment than Haad Thip. However, Carabao Group is 1.52 times more volatile than Haad Thip Public. It trades about 0.04 of its potential returns per unit of risk. Haad Thip Public is currently generating about -0.05 per unit of risk. If you would invest 7,800 in Carabao Group Public on August 31, 2024 and sell it today you would earn a total of 125.00 from holding Carabao Group Public or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carabao Group Public vs. Haad Thip Public
Performance |
| Timeline |
| Carabao Group Public |
| Haad Thip Public |
Carabao Group and Haad Thip Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carabao Group and Haad Thip
The main advantage of trading using opposite Carabao Group and Haad Thip positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, Haad Thip 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 Haad Thip will offset losses from the drop in Haad Thip's long position.| Carabao Group vs. MK Restaurant Group | Carabao Group vs. TRC Construction Public | Carabao Group vs. Bangkok Expressway and | Carabao Group vs. Lohakit Metal Public |
| Haad Thip vs. MK Restaurant Group | Haad Thip vs. TRC Construction Public | Haad Thip vs. Bangkok Expressway and | Haad Thip vs. Lohakit Metal 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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