Correlation Between Hartalega Holdings and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Hartalega Holdings 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 Hartalega Holdings and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartalega Holdings Bhd and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Hartalega Holdings 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 Hartalega Holdings with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartalega Holdings and Carlsberg Brewery.
Diversification Opportunities for Hartalega Holdings and Carlsberg Brewery
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartalega and Carlsberg is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hartalega Holdings Bhd and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Hartalega Holdings 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 Hartalega Holdings Bhd 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 Hartalega Holdings i.e., Hartalega Holdings and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Hartalega Holdings and Carlsberg Brewery
Assuming the 90 days trading horizon Hartalega Holdings Bhd is expected to generate 3.93 times more return on investment than Carlsberg Brewery. However, Hartalega Holdings is 3.93 times more volatile than Carlsberg Brewery Malaysia. It trades about 0.06 of its potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.0 per unit of risk. If you would invest 162.00 in Hartalega Holdings Bhd on August 31, 2024 and sell it today you would earn a total of 187.00 from holding Hartalega Holdings Bhd or generate 115.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hartalega Holdings Bhd vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Hartalega Holdings Bhd |
| Carlsberg Brewery |
Hartalega Holdings and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartalega Holdings and Carlsberg Brewery
The main advantage of trading using opposite Hartalega Holdings and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartalega Holdings 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.| Hartalega Holdings vs. YTL Hospitality REIT | Hartalega Holdings vs. Al Aqar Healthcare | Hartalega Holdings vs. Aeon Credit Service | Hartalega Holdings vs. Senheng New Retail |
| Carlsberg Brewery vs. Petronas Chemicals Group | Carlsberg Brewery vs. EA Technique M | Carlsberg Brewery vs. Malaysia Steel Works | Carlsberg Brewery vs. Resintech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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