Correlation Between Carlsberg Brewery and Hartalega Holdings

Can any of the company-specific risk be diversified away by investing in both Carlsberg Brewery and Hartalega Holdings 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 Hartalega Holdings 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 Hartalega Holdings Bhd, you can compare the effects of market volatilities on Carlsberg Brewery and Hartalega Holdings 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 Hartalega Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg Brewery and Hartalega Holdings.

Diversification Opportunities for Carlsberg Brewery and Hartalega Holdings

0.96

Correlation Coefficient

Carlsberg Brewery  Hartalega Holdings

Almost no diversification

The 3 months correlation between Carlsberg and Hartalega is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg Brewery Malaysia and Hartalega Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartalega Holdings 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 Hartalega Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartalega Holdings Bhd has no effect on the direction of Carlsberg Brewery i.e., Carlsberg Brewery and Hartalega Holdings go up and down completely randomly.

Pair Corralation between Carlsberg Brewery and Hartalega Holdings

Assuming the 90 days trading horizon Carlsberg Brewery Malaysia is expected to generate 0.23 times more return on investment than Hartalega Holdings. However, Carlsberg Brewery Malaysia is 4.28 times less risky than Hartalega Holdings. It trades about -0.15 of its potential returns per unit of risk. Hartalega Holdings Bhd is currently generating about -0.28 per unit of risk. If you would invest  2,068  in Carlsberg Brewery Malaysia on December 26, 2024 and sell it today you would lose (168.00) from holding Carlsberg Brewery Malaysia or give up 8.12% of portfolio value over 90 days.

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

Carlsberg Brewery Malaysia  vs.  Hartalega Holdings 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.

Hartalega Holdings Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hartalega Holdings 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 Hartalega Holdings

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

The idea behind Carlsberg Brewery Malaysia and Hartalega Holdings 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.

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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.