Correlation Between Carlsberg and Aalborg Boldspilklub
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Aalborg Boldspilklub 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 Aalborg Boldspilklub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Aalborg Boldspilklub AS, you can compare the effects of market volatilities on Carlsberg and Aalborg Boldspilklub 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 Aalborg Boldspilklub. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Aalborg Boldspilklub.
Diversification Opportunities for Carlsberg and Aalborg Boldspilklub
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Carlsberg and Aalborg is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Aalborg Boldspilklub AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aalborg Boldspilklub 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 Aalborg Boldspilklub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aalborg Boldspilklub has no effect on the direction of Carlsberg i.e., Carlsberg and Aalborg Boldspilklub go up and down completely randomly.
Pair Corralation between Carlsberg and Aalborg Boldspilklub
Assuming the 90 days trading horizon Carlsberg AS is expected to generate 4.47 times more return on investment than Aalborg Boldspilklub. However, Carlsberg is 4.47 times more volatile than Aalborg Boldspilklub AS. It trades about 0.08 of its potential returns per unit of risk. Aalborg Boldspilklub AS is currently generating about -0.02 per unit of risk. If you would invest 89,800 in Carlsberg AS on December 10, 2024 and sell it today you would earn a total of 7,600 from holding Carlsberg AS or generate 8.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Aalborg Boldspilklub AS
Performance |
| Timeline |
| Carlsberg AS |
| Aalborg Boldspilklub |
Carlsberg and Aalborg Boldspilklub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Aalborg Boldspilklub
The main advantage of trading using opposite Carlsberg and Aalborg Boldspilklub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Aalborg Boldspilklub 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 Aalborg Boldspilklub will offset losses from the drop in Aalborg Boldspilklub's long position.| Carlsberg vs. AP Mller | Carlsberg vs. ROCKWOOL International AS | Carlsberg vs. Royal Unibrew AS | Carlsberg vs. Tryg AS |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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