Correlation Between Carlsberg and Assa Abloy
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Assa Abloy 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 Carlsberg and Assa Abloy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Assa Abloy AB, you can compare the effects of market volatilities on Carlsberg and Assa Abloy 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 Carlsberg with a short position of Assa Abloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Assa Abloy.
Diversification Opportunities for Carlsberg and Assa Abloy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlsberg and Assa is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Assa Abloy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assa Abloy AB and Carlsberg 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 Carlsberg AS are associated (or correlated) with Assa Abloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assa Abloy AB has no effect on the direction of Carlsberg i.e., Carlsberg and Assa Abloy go up and down completely randomly.
Pair Corralation between Carlsberg and Assa Abloy
Assuming the 90 days horizon Carlsberg AS is expected to generate 0.8 times more return on investment than Assa Abloy. However, Carlsberg AS is 1.24 times less risky than Assa Abloy. It trades about 0.05 of its potential returns per unit of risk. Assa Abloy AB is currently generating about 0.02 per unit of risk. If you would invest 1,918 in Carlsberg AS on October 23, 2024 and sell it today you would earn a total of 18.00 from holding Carlsberg AS or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Assa Abloy AB
Performance |
| Timeline |
| Carlsberg AS |
| Assa Abloy AB |
Carlsberg and Assa Abloy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Assa Abloy
The main advantage of trading using opposite Carlsberg and Assa Abloy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Assa Abloy 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 Assa Abloy will offset losses from the drop in Assa Abloy's long position.| Carlsberg vs. Suntory Beverage Food | Carlsberg vs. Asahi Group Holdings | Carlsberg vs. Compania Cervecerias Unidas | Carlsberg vs. Heineken NV |
| Assa Abloy vs. Atlas Copco AB | Assa Abloy vs. Carlsberg AS | Assa Abloy vs. DSV Panalpina AS | Assa Abloy vs. Alfa Laval AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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