Correlation Between Carlsberg and Ennogie Solar

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

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

Diversification Opportunities for Carlsberg and Ennogie Solar

0.87

Correlation Coefficient

Carlsberg  Ennogie Solar

Very poor diversification

The 3 months correlation between Carlsberg and Ennogie is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Ennogie Solar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennogie Solar Group 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 Ennogie Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennogie Solar Group has no effect on the direction of Carlsberg i.e., Carlsberg and Ennogie Solar go up and down completely randomly.

Pair Corralation between Carlsberg and Ennogie Solar

Assuming the 90 days trading horizon Carlsberg AS is expected to generate 0.42 times more return on investment than Ennogie Solar. However, Carlsberg AS is 2.35 times less risky than Ennogie Solar. It trades about -0.21 of its potential returns per unit of risk. Ennogie Solar Group is currently generating about -0.13 per unit of risk. If you would invest  109,500  in Carlsberg AS on September 13, 2024 and sell it today you would lose (22,900) from holding Carlsberg AS or give up 20.91% of portfolio value over 90 days.

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

Carlsberg AS  vs.  Ennogie Solar Group

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.

Ennogie Solar Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ennogie Solar Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Carlsberg and Ennogie Solar

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

The idea behind Carlsberg AS and Ennogie Solar Group 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.