Correlation Between Carlsberg Brewery and Resintech Bhd
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Resintech Bhd 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 Resintech Bhd 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 Resintech Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Resintech Bhd 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 Resintech Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Resintech Bhd.
Diversification Opportunities for Carlsberg Brewery and Resintech Bhd
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Carlsberg and Resintech is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Resintech Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resintech 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 Resintech Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resintech Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Resintech Bhd go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Resintech Bhd
Assuming the 90 days trading horizon Carlsberg Brewery is expected to generate 2.32 times less return on investment than Resintech Bhd. But when comparing it to its historical volatility, Carlsberg Brewery Malaysia is 2.09 times less risky than Resintech Bhd. It trades about 0.07 of its potential returns per unit of risk. Resintech Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 49.00 in Resintech Bhd on September 4, 2024 and sell it today you would earn a total of 18.00 from holding Resintech Bhd or generate 36.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Resintech Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| Resintech Bhd |
Carlsberg Brewery and Resintech Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Resintech Bhd
The main advantage of trading using opposite Carlsberg Brewery and Resintech Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Resintech Bhd 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 Resintech Bhd will offset losses from the drop in Resintech Bhd's long position.| Carlsberg Brewery vs. Genetec Technology Bhd | Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. AirAsia X Bhd | Carlsberg Brewery vs. Tambun Indah Land |
| Resintech Bhd vs. Genetec Technology Bhd | Resintech Bhd vs. Carlsberg Brewery Malaysia | Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. AirAsia X 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 CEOs Directory module to screen CEOs from public companies around the world.
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