Correlation Between Carlsberg and Nykredit Invest

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

Diversification Opportunities for Carlsberg and Nykredit Invest

0.69

Correlation Coefficient

Carlsberg  Nykredit Invest

Poor diversification

The 3 months correlation between Carlsberg and Nykredit is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Nykredit Invest Danske in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nykredit Invest 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 Nykredit Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nykredit Invest Danske has no effect on the direction of Carlsberg i.e., Carlsberg and Nykredit Invest go up and down completely randomly.

Pair Corralation between Carlsberg and Nykredit Invest

Assuming the 90 days trading horizon Carlsberg AS is expected to generate 1.22 times more return on investment than Nykredit Invest. However, Carlsberg is 1.22 times more volatile than Nykredit Invest Danske. It trades about -0.08 of its potential returns per unit of risk. Nykredit Invest Danske is currently generating about -0.18 per unit of risk. If you would invest  79,080  in Carlsberg AS on October 26, 2024 and sell it today you would lose (6,060) from holding Carlsberg AS or give up 7.66% of portfolio value over 90 days.

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

Carlsberg AS  vs.  Nykredit Invest Danske

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 unfluctuating 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.

Nykredit Invest Danske

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nykredit Invest Danske 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 fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Carlsberg and Nykredit Invest

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

The idea behind Carlsberg AS and Nykredit Invest Danske 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..