Correlation Between Carlsberg Brewery and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Lotte Chemical 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 Lotte Chemical 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 Lotte Chemical Titan, you can compare the effects of market volatilities on Carlsberg Brewery and Lotte Chemical 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 Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Lotte Chemical.
Diversification Opportunities for Carlsberg Brewery and Lotte Chemical
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carlsberg and Lotte is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Lotte Chemical Titan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Titan 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 Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Titan has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Lotte Chemical go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Lotte Chemical
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.32 times more return on investment than Lotte Chemical. However, Carlsberg Brewery Malaysia is 3.17 times less risky than Lotte Chemical. It trades about -0.35 of its potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.3 per unit of risk. If you would invest 2,066 in Carlsberg Brewery Malaysia on November 5, 2024 and sell it today you would lose (82.00) from holding Carlsberg Brewery Malaysia or give up 3.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Lotte Chemical Titan
Performance |
| Timeline |
| Carlsberg Brewery |
| Lotte Chemical Titan |
Carlsberg Brewery and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Lotte Chemical
The main advantage of trading using opposite Carlsberg Brewery and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Lotte Chemical 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 Lotte Chemical will offset losses from the drop in Lotte Chemical'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 |
| Lotte Chemical vs. Petronas Chemicals Group | Lotte Chemical vs. Techbond Group Bhd | Lotte Chemical vs. Digistar Bhd | Lotte Chemical vs. Tambun Indah Land |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges |