Correlation Between Carlsberg Brewery and Lyc Healthcare

Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Lyc Healthcare 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 Carlsberg Brewery and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlsberg Brewery Malaysia and Lyc Healthcare Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Lyc Healthcare 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 Carlsberg Brewery with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Lyc Healthcare.

Diversification Opportunities for Carlsberg Brewery and Lyc Healthcare

0.75

Correlation Coefficient

Carlsberg Brewery  Lyc Healthcare

Poor diversification

The 3 months correlation between Carlsberg and Lyc is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Lyc Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyc Healthcare Bhd and Carlsberg Brewery 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 Carlsberg Brewery Malaysia are associated (or correlated) with Lyc Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyc Healthcare Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Lyc Healthcare go up and down completely randomly.

Pair Corralation between Carlsberg Brewery and Lyc Healthcare

Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.16 times more return on investment than Lyc Healthcare. However, Carlsberg Brewery Malaysia is 6.17 times less risky than Lyc Healthcare. It trades about -0.26 of its potential returns per unit of risk. Lyc Healthcare Bhd is currently generating about -0.05 per unit of risk. If you would invest  2,087  in Carlsberg Brewery Malaysia on December 2, 2024 and sell it today you would lose (217.00) from holding Carlsberg Brewery Malaysia or give up 10.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Carlsberg Brewery Malaysia  vs.  Lyc Healthcare Bhd

Carlsberg Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Carlsberg Brewery Malaysia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Lyc Healthcare Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lyc Healthcare Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Carlsberg Brewery and Lyc Healthcare

The main advantage of trading using opposite Carlsberg Brewery and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg Brewery position performs unexpectedly, Lyc Healthcare 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 Lyc Healthcare will offset losses from the drop in Lyc Healthcare's long position.

The idea behind Carlsberg Brewery Malaysia and Lyc Healthcare Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.