Correlation Between Carlsberg A/S and Remy Cointreau

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

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

Diversification Opportunities for Carlsberg A/S and Remy Cointreau

-0.77

Correlation Coefficient

Carlsberg A/S  Remy Cointreau

Pay attention - limited upside

The 3 months correlation between Carlsberg and Remy is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Remy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Remy Cointreau SA and Carlsberg A/S 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 Remy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Remy Cointreau SA has no effect on the direction of Carlsberg A/S i.e., Carlsberg A/S and Remy Cointreau go up and down completely randomly.

Pair Corralation between Carlsberg A/S and Remy Cointreau

Assuming the 90 days horizon Carlsberg AS is expected to generate 0.96 times more return on investment than Remy Cointreau. However, Carlsberg AS is 1.04 times less risky than Remy Cointreau. It trades about 0.26 of its potential returns per unit of risk. Remy Cointreau SA is currently generating about -0.13 per unit of risk. If you would invest  8,997  in Carlsberg AS on December 20, 2024 and sell it today you would earn a total of  3,996  from holding Carlsberg AS or generate 44.41% return on investment over 90 days.

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

Carlsberg AS  vs.  Remy Cointreau SA

Carlsberg A/S

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward-looking indicators, Carlsberg A/S reported solid returns over the last few months and may actually be approaching a breakup point.

Remy Cointreau SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Remy Cointreau SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Carlsberg A/S and Remy Cointreau

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

The idea behind Carlsberg AS and Remy Cointreau SA 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 Stocks Directory module to find actively traded stocks across global markets.