Correlation Between SHIP HEALTHCARE and Carlsberg
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and Carlsberg 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 SHIP HEALTHCARE and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and Carlsberg AS, you can compare the effects of market volatilities on SHIP HEALTHCARE and Carlsberg 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 SHIP HEALTHCARE with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and Carlsberg.
Diversification Opportunities for SHIP HEALTHCARE and Carlsberg
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SHIP and Carlsberg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC are associated (or correlated) with Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Carlsberg go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and Carlsberg
Assuming the 90 days horizon SHIP HEALTHCARE is expected to generate 1.02 times less return on investment than Carlsberg. In addition to that, SHIP HEALTHCARE is 1.45 times more volatile than Carlsberg AS. It trades about 0.02 of its total potential returns per unit of risk. Carlsberg AS is currently generating about 0.03 per unit of volatility. If you would invest 7,827 in Carlsberg AS on September 14, 2024 and sell it today you would earn a total of 2,023 from holding Carlsberg AS or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. Carlsberg AS
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| Carlsberg AS |
SHIP HEALTHCARE and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and Carlsberg
The main advantage of trading using opposite SHIP HEALTHCARE and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, Carlsberg 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 will offset losses from the drop in Carlsberg's long position.| SHIP HEALTHCARE vs. Superior Plus Corp | SHIP HEALTHCARE vs. NMI Holdings | SHIP HEALTHCARE vs. SIVERS SEMICONDUCTORS AB | SHIP HEALTHCARE vs. NorAm Drilling AS |
| Carlsberg vs. Superior Plus Corp | Carlsberg vs. SIVERS SEMICONDUCTORS AB | Carlsberg vs. NorAm Drilling AS | Carlsberg vs. Norsk Hydro ASA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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