Correlation Between Carlsberg and Royal Unibrew
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Royal Unibrew 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 Royal Unibrew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Royal Unibrew AS, you can compare the effects of market volatilities on Carlsberg and Royal Unibrew 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 Royal Unibrew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Royal Unibrew.
Diversification Opportunities for Carlsberg and Royal Unibrew
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and Royal is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Royal Unibrew AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Unibrew 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 Royal Unibrew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Unibrew AS has no effect on the direction of Carlsberg i.e., Carlsberg and Royal Unibrew go up and down completely randomly.
Pair Corralation between Carlsberg and Royal Unibrew
Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Royal Unibrew. In addition to that, Carlsberg is 1.44 times more volatile than Royal Unibrew AS. It trades about -0.16 of its total potential returns per unit of risk. Royal Unibrew AS is currently generating about 0.12 per unit of volatility. If you would invest 51,250 in Royal Unibrew AS on September 1, 2024 and sell it today you would earn a total of 1,900 from holding Royal Unibrew AS or generate 3.71% 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. Royal Unibrew AS
Performance |
| Timeline |
| Carlsberg AS |
| Royal Unibrew AS |
Carlsberg and Royal Unibrew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Royal Unibrew
The main advantage of trading using opposite Carlsberg and Royal Unibrew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Royal Unibrew 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 Royal Unibrew will offset losses from the drop in Royal Unibrew's long position.| Carlsberg vs. AP Mller | Carlsberg vs. ROCKWOOL International AS | Carlsberg vs. Royal Unibrew AS | Carlsberg vs. Tryg AS |
| Royal Unibrew vs. ROCKWOOL International AS | Royal Unibrew vs. Tryg AS | Royal Unibrew vs. DSV Panalpina AS | Royal Unibrew vs. GN Store Nord |
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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