Correlation Between Leader Steel and Carlsberg Brewery
Can any of the company-specific risk be diversified away by investing in both Leader Steel 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 Leader Steel and Carlsberg Brewery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leader Steel Holdings and Carlsberg Brewery Malaysia, you can compare the effects of market volatilities on Leader Steel 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 Leader Steel with a short position of Carlsberg Brewery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leader Steel and Carlsberg Brewery.
Diversification Opportunities for Leader Steel and Carlsberg Brewery
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leader and Carlsberg is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Leader Steel Holdings and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Leader Steel 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 Leader Steel Holdings 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 Leader Steel i.e., Leader Steel and Carlsberg Brewery go up and down completely randomly.
Pair Corralation between Leader Steel and Carlsberg Brewery
Assuming the 90 days trading horizon Leader Steel is expected to generate 1.03 times less return on investment than Carlsberg Brewery. In addition to that, Leader Steel is 3.87 times more volatile than Carlsberg Brewery Malaysia. It trades about 0.08 of its total potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about 0.34 per unit of volatility. If you would invest 1,944 in Carlsberg Brewery Malaysia on August 28, 2024 and sell it today you would earn a total of 116.00 from holding Carlsberg Brewery Malaysia or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Leader Steel Holdings vs. Carlsberg Brewery Malaysia
Performance |
| Timeline |
| Leader Steel Holdings |
| Carlsberg Brewery |
Leader Steel and Carlsberg Brewery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leader Steel and Carlsberg Brewery
The main advantage of trading using opposite Leader Steel and Carlsberg Brewery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leader Steel 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.| Leader Steel vs. Daya Materials Bhd | Leader Steel vs. CSC Steel Holdings | Leader Steel vs. Kossan Rubber Industries | Leader Steel vs. Farm Price Holdings |
| Carlsberg Brewery vs. Digistar Bhd | Carlsberg Brewery vs. Minetech Resources Bhd | Carlsberg Brewery vs. OpenSys M Bhd | Carlsberg Brewery vs. Insas 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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