Correlation Between DSV Panalpina and Carlsberg

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

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

Diversification Opportunities for DSV Panalpina and Carlsberg

-0.42

Correlation Coefficient

DSV Panalpina  Carlsberg

Very good diversification

The 3 months correlation between DSV and Carlsberg is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding DSV Panalpina AS and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and DSV Panalpina 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 DSV Panalpina 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 DSV Panalpina i.e., DSV Panalpina and Carlsberg go up and down completely randomly.

Pair Corralation between DSV Panalpina and Carlsberg

Assuming the 90 days trading horizon DSV Panalpina AS is expected to under-perform the Carlsberg. But the stock apears to be less risky and, when comparing its historical volatility, DSV Panalpina AS is 3.9 times less risky than Carlsberg. The stock trades about -0.12 of its potential returns per unit of risk. The Carlsberg AS is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  79,134  in Carlsberg AS on December 30, 2024 and sell it today you would earn a total of  14,266  from holding Carlsberg AS or generate 18.03% return on investment over 90 days.

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

DSV Panalpina AS  vs.  Carlsberg AS

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DSV Panalpina AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Carlsberg AS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 5 (%) 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 DSV Panalpina and Carlsberg

The main advantage of trading using opposite DSV Panalpina and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSV Panalpina 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 DSV Panalpina 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.