Correlation Between Carabao Group and Asia Sermkij

Can any of the company-specific risk be diversified away by investing in both Carabao Group and Asia Sermkij 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 Asia Sermkij 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 Asia Sermkij Leasing, you can compare the effects of market volatilities on Carabao Group and Asia Sermkij 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 Asia Sermkij. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carabao Group and Asia Sermkij.

Diversification Opportunities for Carabao Group and Asia Sermkij

-0.53

Correlation Coefficient

Carabao Group  Asia Sermkij

Excellent diversification

The 3 months correlation between Carabao and Asia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and Asia Sermkij Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Sermkij Leasing 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 Asia Sermkij. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Sermkij Leasing has no effect on the direction of Carabao Group i.e., Carabao Group and Asia Sermkij go up and down completely randomly.

Pair Corralation between Carabao Group and Asia Sermkij

Assuming the 90 days trading horizon Carabao Group Public is expected to generate 0.75 times more return on investment than Asia Sermkij. However, Carabao Group Public is 1.34 times less risky than Asia Sermkij. It trades about 0.11 of its potential returns per unit of risk. Asia Sermkij Leasing is currently generating about 0.03 per unit of risk. If you would invest  7,750  in Carabao Group Public on September 16, 2024 and sell it today you would earn a total of  225.00  from holding Carabao Group Public or generate 2.9% 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.  Asia Sermkij Leasing

Carabao Group Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carabao Group Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, Carabao Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Asia Sermkij Leasing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Sermkij Leasing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Carabao Group and Asia Sermkij

The main advantage of trading using opposite Carabao Group and Asia Sermkij positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carabao Group position performs unexpectedly, Asia Sermkij 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 Asia Sermkij will offset losses from the drop in Asia Sermkij's long position.

The idea behind Carabao Group Public and Asia Sermkij Leasing 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.