Correlation Between Carlsberg and Impero AS

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

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

Diversification Opportunities for Carlsberg and Impero AS

-0.32

Correlation Coefficient

Carlsberg  Impero AS

Very good diversification

The 3 months correlation between Carlsberg and Impero is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Impero AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impero 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 Impero AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impero AS has no effect on the direction of Carlsberg i.e., Carlsberg and Impero AS go up and down completely randomly.

Pair Corralation between Carlsberg and Impero AS

Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Impero AS. But the stock apears to be less risky and, when comparing its historical volatility, Carlsberg AS is 3.62 times less risky than Impero AS. The stock trades about -0.18 of its potential returns per unit of risk. The Impero AS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  570.00  in Impero AS on September 3, 2024 and sell it today you would earn a total of  5.00  from holding Impero AS or generate 0.88% 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.  Impero AS

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.

Impero AS

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Impero AS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Impero AS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Carlsberg and Impero AS

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

The idea behind Carlsberg AS and Impero 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.