Correlation Between Carlsberg and Asahi Group

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

By analyzing existing cross correlation between Carlsberg AS and Asahi Group Holdings, you can compare the effects of market volatilities on Carlsberg and Asahi Group 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 with a short position of Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Asahi Group.

Diversification Opportunities for Carlsberg and Asahi Group

0.65

Correlation Coefficient

Carlsberg  Asahi Group

Poor diversification

The 3 months correlation between Carlsberg and Asahi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings and Carlsberg 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 AS are associated (or correlated) with Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of Carlsberg i.e., Carlsberg and Asahi Group go up and down completely randomly.

Pair Corralation between Carlsberg and Asahi Group

Assuming the 90 days horizon Carlsberg AS is expected to generate 0.37 times more return on investment than Asahi Group. However, Carlsberg AS is 2.74 times less risky than Asahi Group. It trades about 0.32 of its potential returns per unit of risk. Asahi Group Holdings is currently generating about 0.05 per unit of risk. If you would invest  1,865  in Carlsberg AS on December 30, 2024 and sell it today you would earn a total of  703.00  from holding Carlsberg AS or generate 37.69% return on investment over 90 days.

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

Carlsberg AS  vs.  Asahi Group Holdings

Carlsberg AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Carlsberg showed solid returns over the last few months and may actually be approaching a breakup point.

Asahi Group Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asahi Group Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Asahi Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlsberg and Asahi Group

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

The idea behind Carlsberg AS and Asahi Group Holdings 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.