Correlation Between Carlsberg and DSV Panalpina

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

By analyzing existing cross correlation between Carlsberg AS and DSV Panalpina AS, you can compare the effects of market volatilities on Carlsberg and DSV Panalpina 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 DSV Panalpina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and DSV Panalpina.

Diversification Opportunities for Carlsberg and DSV Panalpina

-0.11

Correlation Coefficient

Carlsberg  DSV Panalpina

Good diversification

The 3 months correlation between Carlsberg and DSV is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina AS 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 DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Carlsberg i.e., Carlsberg and DSV Panalpina go up and down completely randomly.

Pair Corralation between Carlsberg and DSV Panalpina

Assuming the 90 days horizon Carlsberg AS is expected to generate 0.98 times more return on investment than DSV Panalpina. However, Carlsberg AS is 1.02 times less risky than DSV Panalpina. It trades about 0.32 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.03 per unit of risk. If you would invest  1,851  in Carlsberg AS on December 26, 2024 and sell it today you would earn a total of  690.00  from holding Carlsberg AS or generate 37.28% return on investment over 90 days.

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

Carlsberg AS  vs.  DSV Panalpina AS

Carlsberg AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 25 (%) 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.

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, DSV Panalpina is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carlsberg and DSV Panalpina

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

The idea behind Carlsberg AS and DSV Panalpina AS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.