Correlation Between Ichitan Group and Carabao Group
Can any of the company-specific risk be diversified away by investing in both Ichitan Group and Carabao Group 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 Ichitan Group and Carabao Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ichitan Group Public and Carabao Group Public, you can compare the effects of market volatilities on Ichitan Group and Carabao Group 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 Ichitan Group with a short position of Carabao Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ichitan Group and Carabao Group.
Diversification Opportunities for Ichitan Group and Carabao Group
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ichitan and Carabao is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ichitan Group Public and Carabao Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carabao Group Public and Ichitan 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 Ichitan Group Public are associated (or correlated) with Carabao Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carabao Group Public has no effect on the direction of Ichitan Group i.e., Ichitan Group and Carabao Group go up and down completely randomly.
Pair Corralation between Ichitan Group and Carabao Group
Assuming the 90 days trading horizon Ichitan Group Public is expected to generate 0.7 times more return on investment than Carabao Group. However, Ichitan Group Public is 1.43 times less risky than Carabao Group. It trades about -0.03 of its potential returns per unit of risk. Carabao Group Public is currently generating about -0.07 per unit of risk. If you would invest 1,499 in Ichitan Group Public on September 3, 2024 and sell it today you would lose (19.00) from holding Ichitan Group Public or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ichitan Group Public vs. Carabao Group Public
Performance |
| Timeline |
| Ichitan Group Public |
| Carabao Group Public |
Ichitan Group and Carabao Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ichitan Group and Carabao Group
The main advantage of trading using opposite Ichitan Group and Carabao Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ichitan Group position performs unexpectedly, Carabao Group 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 Carabao Group will offset losses from the drop in Carabao Group's long position.| Ichitan Group vs. Airports of Thailand | Ichitan Group vs. PTT Public | Ichitan Group vs. Bangkok Dusit Medical | Ichitan Group vs. Kasikornbank Public |
| Carabao Group vs. Airports of Thailand | Carabao Group vs. PTT Public | Carabao Group vs. Bangkok Dusit Medical | Carabao Group vs. Kasikornbank 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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