Correlation Between Carlsberg Brewery and Lysaght Galvanized
Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Lysaght Galvanized 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 Lysaght Galvanized 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 Lysaght Galvanized Steel, you can compare the effects of market volatilities on Carlsberg Brewery and Lysaght Galvanized 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 Lysaght Galvanized. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Lysaght Galvanized.
Diversification Opportunities for Carlsberg Brewery and Lysaght Galvanized
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carlsberg and Lysaght is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Lysaght Galvanized Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysaght Galvanized Steel 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 Lysaght Galvanized. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysaght Galvanized Steel has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Lysaght Galvanized go up and down completely randomly.
Pair Corralation between Carlsberg Brewery and Lysaght Galvanized
Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.17 times more return on investment than Lysaght Galvanized. However, Carlsberg Brewery Malaysia is 5.9 times less risky than Lysaght Galvanized. It trades about 0.12 of its potential returns per unit of risk. Lysaght Galvanized Steel is currently generating about 0.01 per unit of risk. If you would invest 1,923 in Carlsberg Brewery Malaysia on October 26, 2024 and sell it today you would earn a total of 99.00 from holding Carlsberg Brewery Malaysia or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg Brewery Malaysia vs. Lysaght Galvanized Steel
Performance |
| Timeline |
| Carlsberg Brewery |
| Lysaght Galvanized Steel |
Carlsberg Brewery and Lysaght Galvanized Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg Brewery and Lysaght Galvanized
The main advantage of trading using opposite Carlsberg Brewery and Lysaght Galvanized positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Lysaght Galvanized 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 Lysaght Galvanized will offset losses from the drop in Lysaght Galvanized's long position.| Carlsberg Brewery vs. SSF Home Group | Carlsberg Brewery vs. Choo Bee Metal | Carlsberg Brewery vs. Icon Offshore Bhd | Carlsberg Brewery vs. BP Plastics Holding |
| Lysaght Galvanized vs. CPE Technology Berhad | Lysaght Galvanized vs. Supercomnet Technologies Bhd | Lysaght Galvanized vs. Sunzen Biotech Bhd | Lysaght Galvanized vs. Carlsberg Brewery Malaysia |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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