Correlation Between TISCO Financial and Carabao Group
Can any of the company-specific risk be diversified away by investing in both TISCO Financial 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 TISCO Financial and Carabao Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TISCO Financial Group and Carabao Group Public, you can compare the effects of market volatilities on TISCO Financial 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 TISCO Financial with a short position of Carabao Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of TISCO Financial and Carabao Group.
Diversification Opportunities for TISCO Financial and Carabao Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TISCO and Carabao is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TISCO Financial Group 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 TISCO Financial 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 TISCO Financial Group 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 TISCO Financial i.e., TISCO Financial and Carabao Group go up and down completely randomly.
Pair Corralation between TISCO Financial and Carabao Group
Assuming the 90 days trading horizon TISCO Financial Group is expected to under-perform the Carabao Group. But the stock apears to be less risky and, when comparing its historical volatility, TISCO Financial Group is 6.79 times less risky than Carabao Group. The stock trades about -0.07 of its potential returns per unit of risk. The Carabao Group Public is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 7,900 in Carabao Group Public on August 30, 2024 and sell it today you would earn a total of 25.00 from holding Carabao Group Public or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TISCO Financial Group vs. Carabao Group Public
Performance |
| Timeline |
| TISCO Financial Group |
| Carabao Group Public |
TISCO Financial and Carabao Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TISCO Financial and Carabao Group
The main advantage of trading using opposite TISCO Financial and Carabao Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TISCO Financial 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.| TISCO Financial vs. Kasikornbank Public | TISCO Financial vs. Kiatnakin Phatra Bank | TISCO Financial vs. SCB X Public | TISCO Financial vs. Bangkok Bank Public |
| Carabao Group vs. CP ALL Public | Carabao Group vs. Minor International Public | Carabao Group vs. Srisawad Power 1979 | Carabao Group vs. Home Product Center |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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