Correlation Between Carabao Group and PRG Public
Can any of the company-specific risk be diversified away by investing in both Carabao Group and PRG 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 PRG 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 PRG Public, you can compare the effects of market volatilities on Carabao Group and PRG 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 PRG Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and PRG Public.
Diversification Opportunities for Carabao Group and PRG Public
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Carabao and PRG is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and PRG Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRG 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 PRG Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRG Public has no effect on the direction of Carabao Group i.e., Carabao Group and PRG Public go up and down completely randomly.
Pair Corralation between Carabao Group and PRG Public
Assuming the 90 days trading horizon Carabao Group Public is expected to under-perform the PRG Public. But the stock apears to be less risky and, when comparing its historical volatility, Carabao Group Public is 31.7 times less risky than PRG Public. The stock trades about 0.0 of its potential returns per unit of risk. The PRG Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,101 in PRG Public on August 28, 2024 and sell it today you would lose (216.00) from holding PRG Public or give up 19.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carabao Group Public vs. PRG Public
Performance |
| Timeline |
| Carabao Group Public |
| PRG Public |
Carabao Group and PRG Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carabao Group and PRG Public
The main advantage of trading using opposite Carabao Group and PRG Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, PRG 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 PRG Public will offset losses from the drop in PRG Public's long position.The idea behind Carabao Group Public and PRG Public 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.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |