Correlation Between Carlsberg Brewery and PBA Holdings
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and PBA Holdings 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 PBA Holdings 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 PBA Holdings Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and PBA Holdings 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 PBA Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and PBA Holdings.
Diversification Opportunities for Carlsberg Brewery and PBA Holdings
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carlsberg and PBA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and PBA Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBA Holdings 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 PBA Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBA Holdings Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and PBA Holdings go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and PBA Holdings
Assuming the 90 days trading horizon Carlsberg Brewery is expected to generate 14.33 times less return on investment than PBA Holdings. But when comparing it to its historical volatility, Carlsberg Brewery Malaysia is 4.81 times less risky than PBA Holdings. It trades about 0.03 of its potential returns per unit of risk. PBA Holdings Bhd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 78.00 in PBA Holdings Bhd on September 2, 2024 and sell it today you would earn a total of 139.00 from holding PBA Holdings Bhd or generate 178.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.99% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. PBA Holdings Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| PBA Holdings Bhd |
Carlsberg Brewery and PBA Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and PBA Holdings
The main advantage of trading using opposite Carlsberg Brewery and PBA Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, PBA Holdings 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 PBA Holdings will offset losses from the drop in PBA Holdings' long position.| Carlsberg Brewery vs. Heineken Bhd | Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Swift Haulage Bhd | Carlsberg Brewery vs. Insas Bhd |
| PBA Holdings vs. BP Plastics Holding | PBA Holdings vs. Datasonic Group Bhd | PBA Holdings vs. Leader Steel Holdings | PBA Holdings vs. Diversified Gateway Solutions |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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