Correlation Between Carlsberg Brewery and Sports Toto
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Sports Toto 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 Sports Toto 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 Sports Toto Berhad, you can compare the effects of market volatilities on Carlsberg Brewery and Sports Toto 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 Sports Toto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Sports Toto.
Diversification Opportunities for Carlsberg Brewery and Sports Toto
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carlsberg and Sports is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Sports Toto Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Toto Berhad 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 Sports Toto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Toto Berhad has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Sports Toto go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Sports Toto
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to under-perform the Sports Toto. But the stock apears to be less risky and, when comparing its historical volatility, Carlsberg Brewery Malaysia is 1.82 times less risky than Sports Toto. The stock trades about -0.35 of its potential returns per unit of risk. The Sports Toto Berhad is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 151.00 in Sports Toto Berhad on November 5, 2024 and sell it today you would earn a total of 5.00 from holding Sports Toto Berhad or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Sports Toto Berhad
Performance |
| Timeline |
| Carlsberg Brewery |
| Sports Toto Berhad |
Carlsberg Brewery and Sports Toto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Sports Toto
The main advantage of trading using opposite Carlsberg Brewery and Sports Toto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Sports Toto 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 Sports Toto will offset losses from the drop in Sports Toto's long position.| Carlsberg Brewery vs. Sapura Industrial Bhd | Carlsberg Brewery vs. Press Metal Bhd | Carlsberg Brewery vs. Mercury Industries Bhd | Carlsberg Brewery vs. Binasat Communications Bhd |
| Sports Toto vs. Impiana Hotels Bhd | Sports Toto vs. Cloudpoint Technology Berhad | Sports Toto vs. Apollo Food Holdings | Sports Toto vs. PESTECH International 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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