Correlation Between Melewar Industrial and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Melewar Industrial and Carlsberg Brewery 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 Melewar Industrial and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melewar Industrial Group and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Melewar Industrial and Carlsberg Brewery 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 Melewar Industrial with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melewar Industrial and Carlsberg Brewery.
Diversification Opportunities for Melewar Industrial and Carlsberg Brewery
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Melewar and Carlsberg is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Melewar Industrial Group and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Melewar Industrial 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 Melewar Industrial Group are associated (or correlated) with Carlsberg Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg Brewery has no effect on the direction of Melewar Industrial i.e., Melewar Industrial and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Melewar Industrial and Carlsberg Brewery
Assuming the 90 days trading horizon Melewar Industrial Group is expected to under-perform the Carlsberg Brewery. In addition to that, Melewar Industrial is 3.16 times more volatile than Carlsberg Brewery Malaysia. It trades about -0.01 of its total potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.06 per unit of volatility. If you would invest 1,811 in Carlsberg Brewery Malaysia on August 27, 2024 and sell it today you would earn a total of 229.00 from holding Carlsberg Brewery Malaysia or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melewar Industrial Group vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Melewar Industrial |
| Carlsberg Brewery |
Melewar Industrial and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melewar Industrial and Carlsberg Brewery
The main advantage of trading using opposite Melewar Industrial and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melewar Industrial position performs unexpectedly, Carlsberg Brewery 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 Carlsberg Brewery will offset losses from the drop in Carlsberg Brewery's long position.| Melewar Industrial vs. Press Metal Bhd | Melewar Industrial vs. Southern Steel Bhd | Melewar Industrial vs. Eonmetall Group Bhd |
| Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Minetech Resources Bhd | Carlsberg Brewery vs. OpenSys M Bhd | Carlsberg Brewery vs. Insas 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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