Correlation Between Carlsberg Brewery and Cosmos Technology
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Cosmos Technology 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 Cosmos Technology 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 Cosmos Technology International, you can compare the effects of market volatilities on Carlsberg Brewery and Cosmos Technology 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 Cosmos Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Cosmos Technology.
Diversification Opportunities for Carlsberg Brewery and Cosmos Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlsberg and Cosmos is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Cosmos Technology Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cosmos 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 Cosmos Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cosmos Technology has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Cosmos Technology go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Cosmos Technology
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.3 times more return on investment than Cosmos Technology. However, Carlsberg Brewery Malaysia is 3.29 times less risky than Cosmos Technology. It trades about 0.03 of its potential returns per unit of risk. Cosmos Technology International is currently generating about 0.01 per unit of risk. 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 |
Carlsberg Brewery Malaysia vs. Cosmos Technology Internationa
Performance |
| Timeline |
| Carlsberg Brewery |
| Cosmos Technology |
Carlsberg Brewery and Cosmos Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Cosmos Technology
The main advantage of trading using opposite Carlsberg Brewery and Cosmos Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Cosmos Technology 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 Cosmos Technology will offset losses from the drop in Cosmos Technology's long position.| Carlsberg Brewery vs. Petronas Chemicals Group | Carlsberg Brewery vs. EA Technique M | Carlsberg Brewery vs. Malaysia Steel Works | Carlsberg Brewery vs. Resintech Bhd |
| Cosmos Technology vs. Uchi Technologies Bhd | Cosmos Technology vs. Impiana Hotels Bhd | Cosmos Technology vs. Mycron Steel Bhd | Cosmos Technology vs. Sports Toto Berhad |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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