Correlation Between Kobay Tech and Carlsberg Brewery

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

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

Diversification Opportunities for Kobay Tech and Carlsberg Brewery

0.92

Correlation Coefficient

Kobay Tech  Carlsberg Brewery

Almost no diversification

The 3 months correlation between Kobay and Carlsberg is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Kobay Tech Bhd and Carlsberg Brewery Malaysia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg Brewery and Kobay Tech 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 Kobay Tech Bhd are associated (or correlated) with Carlsberg Brewery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg Brewery has no effect on the direction of Kobay Tech i.e., Kobay Tech and Carlsberg Brewery go up and down completely randomly.

Pair Corralation between Kobay Tech and Carlsberg Brewery

Assuming the 90 days trading horizon Kobay Tech Bhd is expected to under-perform the Carlsberg Brewery. In addition to that, Kobay Tech is 2.8 times more volatile than Carlsberg Brewery Malaysia. It trades about -0.13 of its total potential returns per unit of risk. Carlsberg Brewery Malaysia is currently generating about -0.18 per unit of volatility. If you would invest  2,068  in Carlsberg Brewery Malaysia on December 25, 2024 and sell it today you would lose (192.00) from holding Carlsberg Brewery Malaysia or give up 9.28% of portfolio value over 90 days.

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

Kobay Tech Bhd  vs.  Carlsberg Brewery Malaysia

Kobay Tech Bhd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kobay Tech 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.

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.

Pair Trading with Kobay Tech and Carlsberg Brewery

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

The idea behind Kobay Tech Bhd and Carlsberg Brewery Malaysia 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.