Correlation Between Genetec Technology and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Genetec Technology 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 Genetec Technology and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genetec Technology Bhd and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Genetec Technology 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 Genetec Technology with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genetec Technology and Carlsberg Brewery.
Diversification Opportunities for Genetec Technology and Carlsberg Brewery
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genetec and Carlsberg is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Genetec Technology 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 Genetec Technology 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 Genetec Technology 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 Genetec Technology i.e., Genetec Technology and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Genetec Technology and Carlsberg Brewery
Assuming the 90 days trading horizon Genetec Technology Bhd is expected to generate 7.7 times more return on investment than Carlsberg Brewery. However, Genetec Technology is 7.7 times more volatile than Carlsberg Brewery Malaysia. It trades about 0.13 of its potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.12 per unit of risk. If you would invest 82.00 in Genetec Technology Bhd on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Genetec Technology Bhd or generate 54.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genetec Technology Bhd vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Genetec Technology Bhd |
| Carlsberg Brewery |
Genetec Technology and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genetec Technology and Carlsberg Brewery
The main advantage of trading using opposite Genetec Technology and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genetec Technology 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.| Genetec Technology vs. YX Precious Metals | Genetec Technology vs. Nova Wellness Group | Genetec Technology vs. Choo Bee Metal | Genetec Technology vs. YTL Hospitality REIT |
| Carlsberg Brewery vs. YX Precious Metals | Carlsberg Brewery vs. Central Industrial Corp | Carlsberg Brewery vs. Choo Bee Metal | Carlsberg Brewery vs. Eonmetall Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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