Correlation Between Carlsberg Brewery and Al Aqar
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Al Aqar 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 Al Aqar 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 Al Aqar Healthcare, you can compare the effects of market volatilities on Carlsberg Brewery and Al Aqar 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 Al Aqar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Al Aqar.
Diversification Opportunities for Carlsberg Brewery and Al Aqar
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlsberg and 5116 is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Al Aqar Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Al Aqar Healthcare 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 Al Aqar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Al Aqar Healthcare has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Al Aqar go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Al Aqar
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.7 times more return on investment than Al Aqar. However, Carlsberg Brewery Malaysia is 1.43 times less risky than Al Aqar. It trades about 0.4 of its potential returns per unit of risk. Al Aqar Healthcare is currently generating about -0.03 per unit of risk. If you would invest 1,960 in Carlsberg Brewery Malaysia on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Carlsberg Brewery Malaysia or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Al Aqar Healthcare
Performance |
| Timeline |
| Carlsberg Brewery |
| Al Aqar Healthcare |
Carlsberg Brewery and Al Aqar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Al Aqar
The main advantage of trading using opposite Carlsberg Brewery and Al Aqar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Al Aqar 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 Al Aqar will offset losses from the drop in Al Aqar's long position.| Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Swift Haulage Bhd | Carlsberg Brewery vs. Insas Bhd | Carlsberg Brewery vs. Kumpulan Kitacon Berhad |
| Al Aqar vs. YTL Hospitality REIT | Al Aqar vs. Digistar Bhd | Al Aqar vs. Minetech Resources Bhd | Al Aqar vs. Swift Haulage 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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