Correlation Between Empire State and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Empire State 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 Empire State and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Carlsberg AS, you can compare the effects of market volatilities on Empire State 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 Empire State with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Carlsberg.
Diversification Opportunities for Empire State and Carlsberg
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Empire and Carlsberg is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Empire State 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 Empire State Realty 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 Empire State i.e., Empire State and Carlsberg go up and down completely randomly.
Pair Corralation between Empire State and Carlsberg
Given the investment horizon of 90 days Empire State Realty is expected to under-perform the Carlsberg. But the stock apears to be less risky and, when comparing its historical volatility, Empire State Realty is 1.32 times less risky than Carlsberg. The stock trades about -0.31 of its potential returns per unit of risk. The Carlsberg AS is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 73,540 in Carlsberg AS on November 27, 2024 and sell it today you would earn a total of 15,100 from holding Carlsberg AS or generate 20.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Empire State Realty vs. Carlsberg AS
Performance |
| Timeline |
| Empire State Realty |
| Carlsberg AS |
Empire State and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Carlsberg
The main advantage of trading using opposite Empire State and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State 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.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Carlsberg vs. Kreditbanken AS | Carlsberg vs. Dataproces Group AS | Carlsberg vs. Laan Spar Bank | Carlsberg vs. Nordfyns Bank 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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