Correlation Between Daya Materials and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Daya Materials and Carlsberg Brewery 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 Daya Materials and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daya Materials Bhd and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Daya Materials and Carlsberg Brewery 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 Daya Materials with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daya Materials and Carlsberg Brewery.
Diversification Opportunities for Daya Materials and Carlsberg Brewery
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Daya and Carlsberg is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Daya Materials Bhd and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Daya Materials 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 Daya Materials Bhd are associated (or correlated) with Carlsberg Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg Brewery has no effect on the direction of Daya Materials i.e., Daya Materials and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Daya Materials and Carlsberg Brewery
Assuming the 90 days trading horizon Daya Materials Bhd is expected to under-perform the Carlsberg Brewery. In addition to that, Daya Materials is 4.18 times more volatile than Carlsberg Brewery Malaysia. It trades about -0.02 of its total potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.03 per unit of volatility. If you would invest 1,933 in Carlsberg Brewery Malaysia on August 31, 2024 and sell it today you would earn a total of 159.00 from holding Carlsberg Brewery Malaysia or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daya Materials Bhd vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Daya Materials Bhd |
| Carlsberg Brewery |
Daya Materials and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daya Materials and Carlsberg Brewery
The main advantage of trading using opposite Daya Materials and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daya Materials position performs unexpectedly, Carlsberg Brewery 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 Carlsberg Brewery will offset losses from the drop in Carlsberg Brewery's long position.| Daya Materials vs. Icon Offshore Bhd | Daya Materials vs. Barakah Offshore Petroleum | Daya Materials vs. Digistar Bhd | Daya Materials vs. Minetech Resources Bhd |
| Carlsberg Brewery vs. Petronas Chemicals Group | Carlsberg Brewery vs. EA Technique M | Carlsberg Brewery vs. Malaysia Steel Works | Carlsberg Brewery vs. Resintech Bhd |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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