Correlation Between Carlsberg Brewery and Kamdar Group
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Kamdar Group 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 Kamdar Group 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 Kamdar Group Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Kamdar Group 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 Kamdar Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Kamdar Group.
Diversification Opportunities for Carlsberg Brewery and Kamdar Group
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and Kamdar is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Kamdar Group Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kamdar Group 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 Kamdar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kamdar Group Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Kamdar Group go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Kamdar Group
Assuming the 90 days trading horizon Carlsberg Brewery is expected to generate 7.74 times less return on investment than Kamdar Group. But when comparing it to its historical volatility, Carlsberg Brewery Malaysia is 6.58 times less risky than Kamdar Group. It trades about 0.06 of its potential returns per unit of risk. Kamdar Group Bhd is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Kamdar Group Bhd on September 14, 2024 and sell it today you would earn a total of 15.00 from holding Kamdar Group Bhd or generate 75.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Kamdar Group Bhd
Performance |
| Timeline |
| Carlsberg Brewery |
| Kamdar Group Bhd |
Carlsberg Brewery and Kamdar Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Kamdar Group
The main advantage of trading using opposite Carlsberg Brewery and Kamdar Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Kamdar Group 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 Kamdar Group will offset losses from the drop in Kamdar Group's long position.| Carlsberg Brewery vs. Al Aqar Healthcare | Carlsberg Brewery vs. PMB Technology Bhd | Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Minetech Resources Bhd |
| Kamdar Group vs. Cosmos Technology International | Kamdar Group vs. Al Aqar Healthcare | Kamdar Group vs. Carlsberg Brewery Malaysia | Kamdar Group vs. IHH 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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