Correlation Between Carlsberg and Handelsinvest Danske

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

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

Diversification Opportunities for Carlsberg and Handelsinvest Danske

-0.7

Correlation Coefficient

Carlsberg  Handelsinvest Danske

Excellent diversification

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

Pair Corralation between Carlsberg and Handelsinvest Danske

Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Handelsinvest Danske. In addition to that, Carlsberg is 15.07 times more volatile than Handelsinvest Danske Obligationer. It trades about -0.15 of its total potential returns per unit of risk. Handelsinvest Danske Obligationer is currently generating about 0.22 per unit of volatility. If you would invest  9,793  in Handelsinvest Danske Obligationer on September 22, 2024 and sell it today you would earn a total of  53.00  from holding Handelsinvest Danske Obligationer or generate 0.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Carlsberg AS  vs.  Handelsinvest Danske Obligatio

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Handelsinvest Danske

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Handelsinvest Danske Obligationer are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking signals, Handelsinvest Danske is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Carlsberg and Handelsinvest Danske

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

The idea behind Carlsberg AS and Handelsinvest Danske Obligationer 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.