Correlation Between Carlsberg and DI Global

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

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

Diversification Opportunities for Carlsberg and DI Global

-0.37

Correlation Coefficient

Carlsberg  DI Global

Very good diversification

The 3 months correlation between Carlsberg and DKIGSFUT is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and DI Global Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DI Global Sustainable 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 DI Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DI Global Sustainable has no effect on the direction of Carlsberg i.e., Carlsberg and DI Global go up and down completely randomly.

Pair Corralation between Carlsberg and DI Global

Assuming the 90 days trading horizon Carlsberg AS is expected to generate 1.71 times more return on investment than DI Global. However, Carlsberg is 1.71 times more volatile than DI Global Sustainable. It trades about 0.28 of its potential returns per unit of risk. DI Global Sustainable is currently generating about -0.04 per unit of risk. If you would invest  66,961  in Carlsberg AS on December 28, 2024 and sell it today you would earn a total of  20,499  from holding Carlsberg AS or generate 30.61% 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.  DI Global Sustainable

Carlsberg AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Carlsberg sustained solid returns over the last few months and may actually be approaching a breakup point.

DI Global Sustainable

Risk-Adjusted Performance

Very Weak

Over the last 90 days DI Global Sustainable has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, DI Global is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Carlsberg and DI Global

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

The idea behind Carlsberg AS and DI Global Sustainable 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.