Correlation Between Royal Unibrew and Copenhagen Airports
Can any of the company-specific risk be diversified away by investing in both Royal Unibrew and Copenhagen Airports 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 Royal Unibrew and Copenhagen Airports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Unibrew AS and Copenhagen Airports AS, you can compare the effects of market volatilities on Royal Unibrew and Copenhagen Airports 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 Royal Unibrew with a short position of Copenhagen Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Unibrew and Copenhagen Airports.
Diversification Opportunities for Royal Unibrew and Copenhagen Airports
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royal and Copenhagen is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Royal Unibrew AS and Copenhagen Airports AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copenhagen Airports and Royal Unibrew 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 Royal Unibrew AS are associated (or correlated) with Copenhagen Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copenhagen Airports has no effect on the direction of Royal Unibrew i.e., Royal Unibrew and Copenhagen Airports go up and down completely randomly.
Pair Corralation between Royal Unibrew and Copenhagen Airports
Assuming the 90 days trading horizon Royal Unibrew AS is expected to generate 1.68 times more return on investment than Copenhagen Airports. However, Royal Unibrew is 1.68 times more volatile than Copenhagen Airports AS. It trades about 0.34 of its potential returns per unit of risk. Copenhagen Airports AS is currently generating about 0.18 per unit of risk. If you would invest 49,260 in Royal Unibrew AS on December 1, 2024 and sell it today you would earn a total of 5,590 from holding Royal Unibrew AS or generate 11.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Unibrew AS vs. Copenhagen Airports AS
Performance |
| Timeline |
| Royal Unibrew AS |
| Copenhagen Airports |
Royal Unibrew and Copenhagen Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Unibrew and Copenhagen Airports
The main advantage of trading using opposite Royal Unibrew and Copenhagen Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Unibrew position performs unexpectedly, Copenhagen Airports 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 Copenhagen Airports will offset losses from the drop in Copenhagen Airports' long position.| Royal Unibrew vs. ROCKWOOL International AS | Royal Unibrew vs. Tryg AS | Royal Unibrew vs. DSV Panalpina AS | Royal Unibrew vs. GN Store Nord |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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