Correlation Between Carlsberg Brewery and PIE Industrial
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and PIE 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 PIE 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 PIE Industrial Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and PIE 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 PIE Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and PIE Industrial.
Diversification Opportunities for Carlsberg Brewery and PIE Industrial
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and PIE is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and PIE Industrial Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIE Industrial 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 PIE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIE Industrial Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and PIE Industrial go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and PIE Industrial
Assuming the 90 days trading horizon Carlsberg Brewery is expected to generate 96.35 times less return on investment than PIE Industrial. But when comparing it to its historical volatility, Carlsberg Brewery Malaysia is 2.75 times less risky than PIE Industrial. It trades about 0.0 of its potential returns per unit of risk. PIE Industrial Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 259.00 in PIE Industrial Bhd on August 30, 2024 and sell it today you would earn a total of 316.00 from holding PIE Industrial Bhd or generate 122.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. PIE Industrial Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| PIE Industrial Bhd |
Carlsberg Brewery and PIE Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and PIE Industrial
The main advantage of trading using opposite Carlsberg Brewery and PIE Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, PIE 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 PIE Industrial will offset losses from the drop in PIE Industrial's long position.| Carlsberg Brewery vs. Tex Cycle Technology | Carlsberg Brewery vs. PIE Industrial Bhd | Carlsberg Brewery vs. Icon Offshore Bhd | Carlsberg Brewery vs. Sports Toto Berhad |
| PIE Industrial vs. Choo Bee Metal | PIE Industrial vs. Shangri La Hotels | PIE Industrial vs. British American Tobacco | PIE Industrial vs. Sungei Bagan Rubber |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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