Correlation Between Carlsberg Brewery and Public Bank
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Public Bank 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 Public Bank 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 Public Bank Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Public Bank 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 Public Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Public Bank.
Diversification Opportunities for Carlsberg Brewery and Public Bank
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlsberg and Public is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Public Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Bank Bhd 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 Public Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Bank Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Public Bank go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Public Bank
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to under-perform the Public Bank. But the stock apears to be less risky and, when comparing its historical volatility, Carlsberg Brewery Malaysia is 1.06 times less risky than Public Bank. The stock trades about 0.0 of its potential returns per unit of risk. The Public Bank Bhd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Public Bank Bhd on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Public Bank Bhd or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Public Bank Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| Public Bank Bhd |
Carlsberg Brewery and Public Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Public Bank
The main advantage of trading using opposite Carlsberg Brewery and Public Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Public Bank 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 Public Bank will offset losses from the drop in Public Bank's long position.| Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Minetech Resources Bhd | Carlsberg Brewery vs. OpenSys M Bhd | Carlsberg Brewery vs. Insas Bhd |
| Public Bank vs. Privasia Technology Bhd | Public Bank vs. ONETECH SOLUTIONS HOLDINGS | Public Bank vs. Lysaght Galvanized Steel | Public Bank vs. PMB Technology 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 CEOs Directory module to screen CEOs from public companies around the world.
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