Correlation Between State Bank and Carlsberg
Can any of the company-specific risk be diversified away by investing in both State 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 State Bank and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Carlsberg AS B, you can compare the effects of market volatilities on State 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 State Bank with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Carlsberg.
Diversification Opportunities for State Bank and Carlsberg
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Carlsberg is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Carlsberg AS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS B and State 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 State Bank of 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 B has no effect on the direction of State Bank i.e., State Bank and Carlsberg go up and down completely randomly.
Pair Corralation between State Bank and Carlsberg
Assuming the 90 days trading horizon State Bank of is expected to generate 1.06 times more return on investment than Carlsberg. However, State Bank is 1.06 times more volatile than Carlsberg AS B. It trades about -0.02 of its potential returns per unit of risk. Carlsberg AS B is currently generating about -0.25 per unit of risk. If you would invest 9,350 in State Bank of on August 24, 2024 and sell it today you would lose (120.00) from holding State Bank of or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Carlsberg AS B
Performance |
| Timeline |
| State Bank |
| Carlsberg AS B |
State Bank and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Carlsberg
The main advantage of trading using opposite State Bank and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State 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.| State Bank vs. Broadridge Financial Solutions | State Bank vs. JB Hunt Transport | State Bank vs. Silvercorp Metals | State Bank vs. EVS Broadcast Equipment |
| Carlsberg vs. Golden Metal Resources | Carlsberg vs. Fulcrum Metals PLC | Carlsberg vs. Panther Metals PLC | Carlsberg vs. Flutter Entertainment PLC |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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