Correlation Between Vestjysk Bank and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Vestjysk 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 Vestjysk Bank and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vestjysk Bank AS and Carlsberg AS, you can compare the effects of market volatilities on Vestjysk 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 Vestjysk Bank with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vestjysk Bank and Carlsberg.
Diversification Opportunities for Vestjysk Bank and Carlsberg
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vestjysk and Carlsberg is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Vestjysk 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 Vestjysk 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 Vestjysk 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 Vestjysk Bank i.e., Vestjysk Bank and Carlsberg go up and down completely randomly.
Pair Corralation between Vestjysk Bank and Carlsberg
Assuming the 90 days trading horizon Vestjysk Bank AS is expected to generate 0.46 times more return on investment than Carlsberg. However, Vestjysk Bank AS is 2.17 times less risky than Carlsberg. It trades about -0.2 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.12 per unit of risk. If you would invest 425.00 in Vestjysk Bank AS on August 28, 2024 and sell it today you would lose (15.00) from holding Vestjysk Bank AS or give up 3.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vestjysk Bank AS vs. Carlsberg AS
Performance |
| Timeline |
| Vestjysk Bank AS |
| Carlsberg AS |
Vestjysk Bank and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vestjysk Bank and Carlsberg
The main advantage of trading using opposite Vestjysk Bank and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vestjysk 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.| Vestjysk Bank vs. Spar Nord Bank | Vestjysk Bank vs. Sydbank AS | Vestjysk Bank vs. Ringkjoebing Landbobank AS | Vestjysk Bank vs. Alm Brand |
| Carlsberg vs. Laan Spar Bank | Carlsberg vs. Vestjysk Bank AS | Carlsberg vs. NTG Nordic Transport | Carlsberg vs. Fynske 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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