Correlation Between Aeon Credit and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Aeon Credit 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 Aeon Credit and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeon Credit Service and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Aeon Credit 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 Aeon Credit with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeon Credit and Carlsberg Brewery.
Diversification Opportunities for Aeon Credit and Carlsberg Brewery
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aeon and Carlsberg is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aeon Credit Service and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Aeon Credit 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 Aeon Credit Service 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 Aeon Credit i.e., Aeon Credit and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Aeon Credit and Carlsberg Brewery
Assuming the 90 days trading horizon Aeon Credit Service is expected to under-perform the Carlsberg Brewery. In addition to that, Aeon Credit is 1.33 times more volatile than Carlsberg Brewery Malaysia. It trades about -0.36 of its total potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about -0.39 per unit of volatility. If you would invest 2,080 in Carlsberg Brewery Malaysia on November 4, 2024 and sell it today you would lose (96.00) from holding Carlsberg Brewery Malaysia or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeon Credit Service vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Aeon Credit Service |
| Carlsberg Brewery |
Aeon Credit and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeon Credit and Carlsberg Brewery
The main advantage of trading using opposite Aeon Credit and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeon Credit 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.| Aeon Credit vs. Malaysia Steel Works | Aeon Credit vs. Sunway Construction Group | Aeon Credit vs. Star Media Group | Aeon Credit vs. Homeritz Bhd |
| Carlsberg Brewery vs. Impiana Hotels Bhd | Carlsberg Brewery vs. CPE Technology Berhad | Carlsberg Brewery vs. Farm Price Holdings | Carlsberg Brewery 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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