Correlation Between Carlsberg Brewery and Computer Forms
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Computer Forms 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 Computer Forms 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 Computer Forms Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Computer Forms 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 Computer Forms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Computer Forms.
Diversification Opportunities for Carlsberg Brewery and Computer Forms
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlsberg and Computer is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Computer Forms Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Forms 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 Computer Forms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Forms Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Computer Forms go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Computer Forms
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.19 times more return on investment than Computer Forms. However, Carlsberg Brewery Malaysia is 5.38 times less risky than Computer Forms. It trades about 0.03 of its potential returns per unit of risk. Computer Forms Bhd is currently generating about -0.01 per unit of risk. If you would invest 1,933 in Carlsberg Brewery Malaysia on August 31, 2024 and sell it today you would earn a total of 159.00 from holding Carlsberg Brewery Malaysia or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Computer Forms Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| Computer Forms Bhd |
Carlsberg Brewery and Computer Forms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Computer Forms
The main advantage of trading using opposite Carlsberg Brewery and Computer Forms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Computer Forms 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 Computer Forms will offset losses from the drop in Computer Forms' long position.| Carlsberg Brewery vs. Petronas Chemicals Group | Carlsberg Brewery vs. EA Technique M | Carlsberg Brewery vs. Malaysia Steel Works | Carlsberg Brewery vs. Resintech Bhd |
| Computer Forms vs. MClean Technologies Bhd | Computer Forms vs. Digistar Bhd | Computer Forms vs. Minetech Resources Bhd | Computer Forms vs. Swift Haulage 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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