Correlation Between Resintech Bhd and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Resintech Bhd 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 Resintech Bhd and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Resintech Bhd and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Resintech Bhd 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 Resintech Bhd with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Resintech Bhd and Carlsberg Brewery.
Diversification Opportunities for Resintech Bhd and Carlsberg Brewery
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Resintech and Carlsberg is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Resintech 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 Resintech Bhd 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 Resintech 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 Resintech Bhd i.e., Resintech Bhd and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Resintech Bhd and Carlsberg Brewery
Assuming the 90 days trading horizon Resintech Bhd is expected to generate 2.29 times more return on investment than Carlsberg Brewery. However, Resintech Bhd is 2.29 times more volatile than Carlsberg Brewery Malaysia. It trades about 0.04 of its potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.03 per unit of risk. If you would invest 51.00 in Resintech Bhd on August 31, 2024 and sell it today you would earn a total of 12.00 from holding Resintech Bhd or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Resintech Bhd vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Resintech Bhd |
| Carlsberg Brewery |
Resintech Bhd and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Resintech Bhd and Carlsberg Brewery
The main advantage of trading using opposite Resintech Bhd and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Resintech Bhd 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.| Resintech Bhd vs. Digistar Bhd | Resintech Bhd vs. Minetech Resources Bhd | Resintech Bhd vs. Swift Haulage Bhd | Resintech Bhd vs. Bina Darulaman Bhd |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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