Correlation Between Carlsberg and Kreditbanken
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Kreditbanken 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 Kreditbanken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Kreditbanken AS, you can compare the effects of market volatilities on Carlsberg and Kreditbanken 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 Kreditbanken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Kreditbanken.
Diversification Opportunities for Carlsberg and Kreditbanken
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carlsberg and Kreditbanken is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Kreditbanken AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kreditbanken AS 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 Kreditbanken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kreditbanken AS has no effect on the direction of Carlsberg i.e., Carlsberg and Kreditbanken go up and down completely randomly.
Pair Corralation between Carlsberg and Kreditbanken
Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Kreditbanken. In addition to that, Carlsberg is 1.5 times more volatile than Kreditbanken AS. It trades about -0.03 of its total potential returns per unit of risk. Kreditbanken AS is currently generating about 0.04 per unit of volatility. If you would invest 416,903 in Kreditbanken AS on October 19, 2024 and sell it today you would earn a total of 108,097 from holding Kreditbanken AS or generate 25.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Kreditbanken AS
Performance |
| Timeline |
| Carlsberg AS |
| Kreditbanken AS |
Carlsberg and Kreditbanken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Kreditbanken
The main advantage of trading using opposite Carlsberg and Kreditbanken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Kreditbanken 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 Kreditbanken will offset losses from the drop in Kreditbanken's long position.| Carlsberg vs. AP Mller | Carlsberg vs. ROCKWOOL International AS | Carlsberg vs. Royal Unibrew AS | Carlsberg vs. Tryg AS |
| Kreditbanken vs. Lollands Bank | Kreditbanken vs. Groenlandsbanken AS | Kreditbanken vs. Skjern Bank AS | Kreditbanken vs. Djurslands Bank |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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