Correlation Between Nordfyns Bank and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Nordfyns Bank 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 Nordfyns Bank and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordfyns Bank AS and Carlsberg AS, you can compare the effects of market volatilities on Nordfyns Bank 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 Nordfyns Bank with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordfyns Bank and Carlsberg.
Diversification Opportunities for Nordfyns Bank and Carlsberg
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nordfyns and Carlsberg is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nordfyns Bank AS and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Nordfyns Bank 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 Nordfyns Bank AS 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 Nordfyns Bank i.e., Nordfyns Bank and Carlsberg go up and down completely randomly.
Pair Corralation between Nordfyns Bank and Carlsberg
Assuming the 90 days trading horizon Nordfyns Bank AS is expected to generate 0.93 times more return on investment than Carlsberg. However, Nordfyns Bank AS is 1.08 times less risky than Carlsberg. It trades about 0.07 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.03 per unit of risk. If you would invest 23,800 in Nordfyns Bank AS on October 25, 2024 and sell it today you would earn a total of 10,200 from holding Nordfyns Bank AS or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nordfyns Bank AS vs. Carlsberg AS
Performance |
| Timeline |
| Nordfyns Bank AS |
| Carlsberg AS |
Nordfyns Bank and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordfyns Bank and Carlsberg
The main advantage of trading using opposite Nordfyns Bank and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordfyns Bank 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.| Nordfyns Bank vs. Skjern Bank AS | Nordfyns Bank vs. Lollands Bank | Nordfyns Bank vs. Djurslands Bank | Nordfyns Bank vs. Moens Bank AS |
| Carlsberg vs. Alefarm Brewing AS | Carlsberg vs. Scandinavian Investment Group | Carlsberg vs. North Media AS | 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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