Correlation Between Carabao Group and TISCO Financial

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

Diversification Opportunities for Carabao Group and TISCO Financial

-0.04

Correlation Coefficient

Carabao Group  TISCO Financial

Good diversification

The 3 months correlation between Carabao and TISCO is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Carabao Group Public and TISCO Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TISCO Financial Group 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 TISCO Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TISCO Financial Group has no effect on the direction of Carabao Group i.e., Carabao Group and TISCO Financial go up and down completely randomly.

Pair Corralation between Carabao Group and TISCO Financial

Assuming the 90 days trading horizon Carabao Group Public is expected to under-perform the TISCO Financial. In addition to that, Carabao Group is 4.5 times more volatile than TISCO Financial Group. It trades about -0.17 of its total potential returns per unit of risk. TISCO Financial Group is currently generating about 0.05 per unit of volatility. If you would invest  9,850  in TISCO Financial Group on December 30, 2024 and sell it today you would earn a total of  150.00  from holding TISCO Financial Group or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Carabao Group Public  vs.  TISCO Financial Group

Carabao Group Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carabao Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

TISCO Financial Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TISCO Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, TISCO Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carabao Group and TISCO Financial

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

The idea behind Carabao Group Public and TISCO Financial Group 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.