Correlation Between Eq Energy and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Eq Energy and Carlsberg 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 Eq Energy and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eq Energy Drink and Carlsberg AS, you can compare the effects of market volatilities on Eq Energy and Carlsberg 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 Eq Energy with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eq Energy and Carlsberg.
Diversification Opportunities for Eq Energy and Carlsberg
Very weak diversification
The 3 months correlation between EQLB and Carlsberg is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Eq Energy Drink and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Eq Energy 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 Eq Energy Drink are associated (or correlated) with Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of Eq Energy i.e., Eq Energy and Carlsberg go up and down completely randomly.
Pair Corralation between Eq Energy and Carlsberg
Given the investment horizon of 90 days Eq Energy Drink is expected to under-perform the Carlsberg. In addition to that, Eq Energy is 8.76 times more volatile than Carlsberg AS. It trades about -0.08 of its total potential returns per unit of risk. Carlsberg AS is currently generating about -0.21 per unit of volatility. If you would invest 2,287 in Carlsberg AS on August 28, 2024 and sell it today you would lose (188.00) from holding Carlsberg AS or give up 8.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eq Energy Drink vs. Carlsberg AS
Performance |
| Timeline |
| Eq Energy Drink |
| Carlsberg AS |
Eq Energy and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eq Energy and Carlsberg
The main advantage of trading using opposite Eq Energy and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eq Energy position performs unexpectedly, Carlsberg 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 Carlsberg will offset losses from the drop in Carlsberg's long position.| Eq Energy vs. Greene Concepts | Eq Energy vs. Fbec Worldwide | Eq Energy vs. National Beverage Corp | Eq Energy vs. Vita Coco |
| Carlsberg vs. Suntory Beverage Food | Carlsberg vs. Asahi Group Holdings | Carlsberg vs. Compania Cervecerias Unidas | Carlsberg vs. Heineken NV |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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