Correlation Between Carlsberg Brewery and Heineken Bhd
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Heineken Bhd 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 Heineken Bhd 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 Heineken Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Heineken Bhd 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 Heineken Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Heineken Bhd.
Diversification Opportunities for Carlsberg Brewery and Heineken Bhd
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlsberg and Heineken is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Heineken Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken 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 Heineken Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Heineken Bhd go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Heineken Bhd
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.7 times more return on investment than Heineken Bhd. However, Carlsberg Brewery Malaysia is 1.42 times less risky than Heineken Bhd. It trades about 0.34 of its potential returns per unit of risk. Heineken Bhd is currently generating about 0.15 per unit of risk. If you would invest 1,944 in Carlsberg Brewery Malaysia on August 28, 2024 and sell it today you would earn a total of 116.00 from holding Carlsberg Brewery Malaysia or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Heineken Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| Heineken Bhd |
Carlsberg Brewery and Heineken Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Heineken Bhd
The main advantage of trading using opposite Carlsberg Brewery and Heineken Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Heineken Bhd 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 Heineken Bhd will offset losses from the drop in Heineken Bhd'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 |
| Heineken Bhd vs. Digistar Bhd | Heineken Bhd vs. Minetech Resources Bhd | Heineken Bhd vs. OpenSys M Bhd | Heineken Bhd vs. Insas 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |