Correlation Between DFDS AS and Carlsberg

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

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

Diversification Opportunities for DFDS AS and Carlsberg

-0.8

Correlation Coefficient

DFDS AS  Carlsberg

Pay attention - limited upside

The 3 months correlation between DFDS and Carlsberg is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding DFDS AS and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and DFDS AS 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 DFDS AS are associated (or correlated) with Carlsberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlsberg AS has no effect on the direction of DFDS AS i.e., DFDS AS and Carlsberg go up and down completely randomly.

Pair Corralation between DFDS AS and Carlsberg

Assuming the 90 days trading horizon DFDS AS is expected to under-perform the Carlsberg. In addition to that, DFDS AS is 2.14 times more volatile than Carlsberg AS. It trades about -0.15 of its total potential returns per unit of risk. Carlsberg AS is currently generating about 0.3 per unit of volatility. If you would invest  66,961  in Carlsberg AS on December 29, 2024 and sell it today you would earn a total of  21,899  from holding Carlsberg AS or generate 32.7% return on investment over 90 days.

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

DFDS AS  vs.  Carlsberg AS

DFDS AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DFDS AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Carlsberg AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Carlsberg sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with DFDS AS and Carlsberg

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

The idea behind DFDS AS and Carlsberg 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.