Correlation Between Carlsberg Brewery and Tex Cycle
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Tex Cycle 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 Carlsberg Brewery and Tex Cycle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg Brewery Malaysia and Tex Cycle Technology, you can compare the effects of market volatilities on Carlsberg Brewery and Tex Cycle 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 Carlsberg Brewery with a short position of Tex Cycle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Tex Cycle.
Diversification Opportunities for Carlsberg Brewery and Tex Cycle
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlsberg and Tex is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Tex Cycle Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tex Cycle Technology and Carlsberg Brewery 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 Carlsberg Brewery Malaysia are associated (or correlated) with Tex Cycle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tex Cycle Technology has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Tex Cycle go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Tex Cycle
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to under-perform the Tex Cycle. But the stock apears to be less risky and, when comparing its historical volatility, Carlsberg Brewery Malaysia is 1.94 times less risky than Tex Cycle. The stock trades about -0.39 of its potential returns per unit of risk. The Tex Cycle Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Tex Cycle Technology on November 28, 2024 and sell it today you would earn a total of 1.00 from holding Tex Cycle Technology or generate 0.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Tex Cycle Technology
Performance |
| Timeline |
| Carlsberg Brewery |
| Tex Cycle Technology |
Carlsberg Brewery and Tex Cycle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Tex Cycle
The main advantage of trading using opposite Carlsberg Brewery and Tex Cycle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Tex Cycle 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 Tex Cycle will offset losses from the drop in Tex Cycle's long position.| Carlsberg Brewery vs. Eonmetall Group Bhd | Carlsberg Brewery vs. TAS Offshore Bhd | Carlsberg Brewery vs. Press Metal Bhd | Carlsberg Brewery vs. YX Precious Metals |
| Tex Cycle vs. PMB Technology Bhd | Tex Cycle vs. Press Metal Bhd | Tex Cycle vs. Eonmetall Group Bhd | Tex Cycle vs. Sungei Bagan Rubber |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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