Correlation Between Sapura Industrial and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Sapura 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 Sapura 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 Sapura Industrial Bhd and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Sapura 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 Sapura Industrial with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Carlsberg Brewery.
Diversification Opportunities for Sapura Industrial and Carlsberg Brewery
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sapura and Carlsberg is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial 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 Sapura 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 Sapura Industrial 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 Sapura Industrial i.e., Sapura Industrial and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Sapura Industrial and Carlsberg Brewery
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 3.6 times more return on investment than Carlsberg Brewery. However, Sapura Industrial is 3.6 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 -0.39 per unit of risk. If you would invest 88.00 in Sapura Industrial Bhd on November 4, 2024 and sell it today you would earn a total of 1.00 from holding Sapura Industrial Bhd or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Carlsberg Brewery |
Sapura Industrial and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Carlsberg Brewery
The main advantage of trading using opposite Sapura Industrial and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura 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.| Sapura Industrial vs. Icon Offshore Bhd | Sapura Industrial vs. Petronas Chemicals Group | Sapura Industrial vs. YX Precious Metals | Sapura Industrial vs. Choo Bee Metal |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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