Correlation Between Carlsberg Brewery and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and FARM FRESH 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 FARM FRESH 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 FARM FRESH BERHAD, you can compare the effects of market volatilities on Carlsberg Brewery and FARM FRESH 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 FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and FARM FRESH.
Diversification Opportunities for Carlsberg Brewery and FARM FRESH
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and FARM is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and FARM FRESH BERHAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM FRESH 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 FARM FRESH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM FRESH BERHAD has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and FARM FRESH go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and FARM FRESH
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to under-perform the FARM FRESH. But the stock apears to be less risky and, when comparing its historical volatility, Carlsberg Brewery Malaysia is 1.74 times less risky than FARM FRESH. The stock trades about 0.0 of its potential returns per unit of risk. The FARM FRESH BERHAD is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 156.00 in FARM FRESH BERHAD on August 24, 2024 and sell it today you would earn a total of 23.00 from holding FARM FRESH BERHAD or generate 14.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Carlsberg Brewery |
| FARM FRESH BERHAD |
Carlsberg Brewery and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and FARM FRESH
The main advantage of trading using opposite Carlsberg Brewery and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, FARM FRESH 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 FARM FRESH will offset losses from the drop in FARM FRESH's long position.| Carlsberg Brewery vs. Heineken Bhd | Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Minetech Resources Bhd | Carlsberg Brewery vs. OpenSys M Bhd |
| FARM FRESH vs. Nestle Bhd | FARM FRESH vs. FGV Holdings Bhd | FARM FRESH vs. Kawan Food Bhd | FARM FRESH vs. Apollo Food Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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