Correlation Between Carlsberg and Beiersdorf
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Beiersdorf 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 Beiersdorf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Beiersdorf AG ADR, you can compare the effects of market volatilities on Carlsberg and Beiersdorf 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 Beiersdorf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Beiersdorf.
Diversification Opportunities for Carlsberg and Beiersdorf
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and Beiersdorf is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Beiersdorf AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beiersdorf AG ADR 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 Beiersdorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beiersdorf AG ADR has no effect on the direction of Carlsberg i.e., Carlsberg and Beiersdorf go up and down completely randomly.
Pair Corralation between Carlsberg and Beiersdorf
Assuming the 90 days horizon Carlsberg AS is expected to generate 1.18 times more return on investment than Beiersdorf. However, Carlsberg is 1.18 times more volatile than Beiersdorf AG ADR. It trades about 0.32 of its potential returns per unit of risk. Beiersdorf AG ADR is currently generating about 0.2 per unit of risk. If you would invest 1,897 in Carlsberg AS on November 7, 2024 and sell it today you would earn a total of 205.00 from holding Carlsberg AS or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Beiersdorf AG ADR
Performance |
| Timeline |
| Carlsberg AS |
| Beiersdorf AG ADR |
Carlsberg and Beiersdorf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Beiersdorf
The main advantage of trading using opposite Carlsberg and Beiersdorf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Beiersdorf 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 Beiersdorf will offset losses from the drop in Beiersdorf's long position.| Carlsberg vs. Suntory Beverage Food | Carlsberg vs. Asahi Group Holdings | Carlsberg vs. Compania Cervecerias Unidas | Carlsberg vs. Heineken NV |
| Beiersdorf vs. Kao Corp ADR | Beiersdorf vs. Henkel AG Co | Beiersdorf vs. Henkel Ag A | Beiersdorf vs. Carlsberg AS |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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