Correlation Between Carlsberg and Wirtek AS
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Wirtek AS 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 Wirtek AS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Wirtek AS, you can compare the effects of market volatilities on Carlsberg and Wirtek AS 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 Wirtek AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Wirtek AS.
Diversification Opportunities for Carlsberg and Wirtek AS
Poor diversification
The 3 months correlation between Carlsberg and Wirtek is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Wirtek AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wirtek 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 Wirtek AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wirtek AS has no effect on the direction of Carlsberg i.e., Carlsberg and Wirtek AS go up and down completely randomly.
Pair Corralation between Carlsberg and Wirtek AS
Assuming the 90 days trading horizon Carlsberg AS is expected to generate 0.77 times more return on investment than Wirtek AS. However, Carlsberg AS is 1.3 times less risky than Wirtek AS. It trades about -0.1 of its potential returns per unit of risk. Wirtek AS is currently generating about -0.32 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 | 95.65% |
| Values | Daily Returns |
Carlsberg AS vs. Wirtek AS
Performance |
| Timeline |
| Carlsberg AS |
| Wirtek AS |
Carlsberg and Wirtek AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Wirtek AS
The main advantage of trading using opposite Carlsberg and Wirtek AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Wirtek AS 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 Wirtek AS will offset losses from the drop in Wirtek AS's long position.| Carlsberg vs. Spar Nord Bank | Carlsberg vs. Djurslands Bank | Carlsberg vs. Strategic Investments AS | Carlsberg vs. Jyske Bank AS |
| Wirtek AS vs. cBrain AS | Wirtek AS vs. FOM Technologies AS | Wirtek AS vs. Penneo AS | Wirtek AS vs. Dataproces Group 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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