Correlation Between Carabao Group and Netbay Public
Can any of the company-specific risk be diversified away by investing in both Carabao Group and Netbay 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 Netbay 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 Netbay Public, you can compare the effects of market volatilities on Carabao Group and Netbay 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 Netbay Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and Netbay Public.
Diversification Opportunities for Carabao Group and Netbay Public
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carabao and Netbay is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and Netbay Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netbay 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 Netbay Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netbay Public has no effect on the direction of Carabao Group i.e., Carabao Group and Netbay Public go up and down completely randomly.
Pair Corralation between Carabao Group and Netbay Public
Assuming the 90 days trading horizon Carabao Group Public is expected to under-perform the Netbay Public. But the stock apears to be less risky and, when comparing its historical volatility, Carabao Group Public is 2.03 times less risky than Netbay Public. The stock trades about -0.06 of its potential returns per unit of risk. The Netbay Public is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Netbay Public on September 4, 2024 and sell it today you would earn a total of 170.00 from holding Netbay Public or generate 10.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carabao Group Public vs. Netbay Public
Performance |
| Timeline |
| Carabao Group Public |
| Netbay Public |
Carabao Group and Netbay Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carabao Group and Netbay Public
The main advantage of trading using opposite Carabao Group and Netbay Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, Netbay 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 Netbay Public will offset losses from the drop in Netbay Public's long position.| Carabao Group vs. Airports of Thailand | Carabao Group vs. PTT Public | Carabao Group vs. Bangkok Dusit Medical | Carabao Group vs. Kasikornbank Public |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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