Correlation Between Royal Unibrew and Matas AS
Can any of the company-specific risk be diversified away by investing in both Royal Unibrew and Matas AS 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 Matas AS 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 Matas AS, you can compare the effects of market volatilities on Royal Unibrew and Matas AS 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 Matas AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Unibrew and Matas AS.
Diversification Opportunities for Royal Unibrew and Matas AS
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Royal and Matas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Royal Unibrew AS and Matas AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matas AS 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 Matas AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matas AS has no effect on the direction of Royal Unibrew i.e., Royal Unibrew and Matas AS go up and down completely randomly.
Pair Corralation between Royal Unibrew and Matas AS
Assuming the 90 days trading horizon Royal Unibrew AS is expected to generate 0.74 times more return on investment than Matas AS. However, Royal Unibrew AS is 1.35 times less risky than Matas AS. It trades about -0.05 of its potential returns per unit of risk. Matas AS is currently generating about -0.05 per unit of risk. If you would invest 53,850 in Royal Unibrew AS on August 25, 2024 and sell it today you would lose (1,050) from holding Royal Unibrew AS or give up 1.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Unibrew AS vs. Matas AS
Performance |
| Timeline |
| Royal Unibrew AS |
| Matas AS |
Royal Unibrew and Matas AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Unibrew and Matas AS
The main advantage of trading using opposite Royal Unibrew and Matas AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Unibrew position performs unexpectedly, Matas AS 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 Matas AS will offset losses from the drop in Matas AS's 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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