Correlation Between Carlsberg and Maj Invest

Can any of the company-specific risk be diversified away by investing in both Carlsberg and Maj 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 Maj 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 Maj Invest Glob, you can compare the effects of market volatilities on Carlsberg and Maj 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 Maj Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Maj Invest.

Diversification Opportunities for Carlsberg and Maj Invest

-0.41

Correlation Coefficient

Carlsberg  Maj Invest

Very good diversification

The 3 months correlation between Carlsberg and Maj is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Maj Invest Glob in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest Glob 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest Glob has no effect on the direction of Carlsberg i.e., Carlsberg and Maj Invest go up and down completely randomly.

Pair Corralation between Carlsberg and Maj Invest

Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Maj Invest. In addition to that, Carlsberg is 1.98 times more volatile than Maj Invest Glob. It trades about -0.13 of its total potential returns per unit of risk. Maj Invest Glob is currently generating about 0.05 per unit of volatility. If you would invest  13,745  in Maj Invest Glob on October 12, 2024 and sell it today you would earn a total of  293.00  from holding Maj Invest Glob or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Carlsberg AS  vs.  Maj Invest Glob

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 unfluctuating performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Maj Invest Glob

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Maj Invest Glob are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Maj Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carlsberg and Maj Invest

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

The idea behind Carlsberg AS and Maj Invest Glob 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.

Check out your portfolio center.

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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.