Correlation Between EHEALTH and Carlsberg
Can any of the company-specific risk be diversified away by investing in both EHEALTH 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 EHEALTH and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Carlsberg AS, you can compare the effects of market volatilities on EHEALTH 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 EHEALTH with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Carlsberg.
Diversification Opportunities for EHEALTH and Carlsberg
Pay attention - limited upside
The 3 months correlation between EHEALTH and Carlsberg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and Carlsberg go up and down completely randomly.
Pair Corralation between EHEALTH and Carlsberg
Assuming the 90 days trading horizon EHEALTH is expected to generate 2.45 times more return on investment than Carlsberg. However, EHEALTH is 2.45 times more volatile than Carlsberg AS. It trades about 0.03 of its potential returns per unit of risk. Carlsberg AS is currently generating about 0.03 per unit of risk. If you would invest 410.00 in EHEALTH on September 14, 2024 and sell it today you would earn a total of 125.00 from holding EHEALTH or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. Carlsberg AS
Performance |
| Timeline |
| EHEALTH |
| Carlsberg AS |
EHEALTH and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Carlsberg
The main advantage of trading using opposite EHEALTH and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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.The idea behind EHEALTH and Carlsberg AS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Carlsberg vs. Superior Plus Corp | Carlsberg vs. SIVERS SEMICONDUCTORS AB | Carlsberg vs. NorAm Drilling AS | Carlsberg vs. Norsk Hydro ASA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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