Correlation Between Carlsberg and Bactiquant
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Bactiquant 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 Bactiquant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Bactiquant AS, you can compare the effects of market volatilities on Carlsberg and Bactiquant 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 Bactiquant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Bactiquant.
Diversification Opportunities for Carlsberg and Bactiquant
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Carlsberg and Bactiquant is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Bactiquant AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bactiquant 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 Bactiquant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bactiquant AS has no effect on the direction of Carlsberg i.e., Carlsberg and Bactiquant go up and down completely randomly.
Pair Corralation between Carlsberg and Bactiquant
Assuming the 90 days trading horizon Carlsberg AS is expected to generate 0.39 times more return on investment than Bactiquant. However, Carlsberg AS is 2.57 times less risky than Bactiquant. It trades about -0.1 of its potential returns per unit of risk. Bactiquant AS is currently generating about -0.1 per unit of risk. If you would invest 75,500 in Carlsberg AS on September 1, 2024 and sell it today you would lose (2,820) from holding Carlsberg AS or give up 3.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Bactiquant AS
Performance |
| Timeline |
| Carlsberg AS |
| Bactiquant AS |
Carlsberg and Bactiquant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Bactiquant
The main advantage of trading using opposite Carlsberg and Bactiquant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Bactiquant 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 Bactiquant will offset losses from the drop in Bactiquant's long position.| Carlsberg vs. Spar Nord Bank | Carlsberg vs. Djurslands Bank | Carlsberg vs. Strategic Investments AS | Carlsberg vs. Jyske Bank AS |
| Bactiquant vs. Sparinvest INDEX Globale | Bactiquant vs. Bavarian Nordic | Bactiquant vs. Investeringsselskabet Luxor AS | Bactiquant vs. cBrain 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 CEOs Directory module to screen CEOs from public companies around the world.
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