Correlation Between Carlsberg and Danske Invest

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

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

Diversification Opportunities for Carlsberg and Danske Invest

-0.7

Correlation Coefficient

Carlsberg  Danske Invest

Excellent diversification

The 3 months correlation between Carlsberg and Danske is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Danske Invest Euro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Invest Euro 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 Danske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Invest Euro has no effect on the direction of Carlsberg i.e., Carlsberg and Danske Invest go up and down completely randomly.

Pair Corralation between Carlsberg and Danske Invest

Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Danske Invest. In addition to that, Carlsberg is 9.37 times more volatile than Danske Invest Euro. It trades about -0.12 of its total potential returns per unit of risk. Danske Invest Euro is currently generating about 0.0 per unit of volatility. If you would invest  9,959  in Danske Invest Euro on September 24, 2024 and sell it today you would earn a total of  1.00  from holding Danske Invest Euro or generate 0.01% 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.  Danske Invest Euro

Carlsberg AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlsberg AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Danske Invest Euro

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Invest Euro are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Danske Invest is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Carlsberg and Danske Invest

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

The idea behind Carlsberg AS and Danske Invest Euro 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 Transaction History module to view history of all your transactions and understand their impact on performance.