Correlation Between Carlsberg Brewery and CB Industrial
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and CB Industrial 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 CB Industrial 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 CB Industrial Product, you can compare the effects of market volatilities on Carlsberg Brewery and CB Industrial 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 CB Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and CB Industrial.
Diversification Opportunities for Carlsberg Brewery and CB Industrial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Carlsberg and 7076 is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and CB Industrial Product in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CB Industrial Product 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 CB Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CB Industrial Product has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and CB Industrial go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and CB Industrial
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.38 times more return on investment than CB Industrial. However, Carlsberg Brewery Malaysia is 2.66 times less risky than CB Industrial. It trades about -0.31 of its potential returns per unit of risk. CB Industrial Product is currently generating about -0.17 per unit of risk. If you would invest 2,078 in Carlsberg Brewery Malaysia on October 25, 2024 and sell it today you would lose (76.00) from holding Carlsberg Brewery Malaysia or give up 3.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. CB Industrial Product
Performance |
| Timeline |
| Carlsberg Brewery |
| CB Industrial Product |
Carlsberg Brewery and CB Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and CB Industrial
The main advantage of trading using opposite Carlsberg Brewery and CB Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, CB Industrial 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 CB Industrial will offset losses from the drop in CB Industrial's long position.| Carlsberg Brewery vs. Aeon Credit Service | Carlsberg Brewery vs. Sapura Industrial Bhd | Carlsberg Brewery vs. Eonmetall Group Bhd | Carlsberg Brewery vs. Mercury Industries Bhd |
| CB Industrial vs. MClean Technologies Bhd | CB Industrial vs. Nova Wellness Group | CB Industrial vs. Apex Healthcare Bhd | CB Industrial vs. Lyc Healthcare 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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