Correlation Between Matas AS and Carlsberg

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

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

Diversification Opportunities for Matas AS and Carlsberg

0.66

Correlation Coefficient

Matas AS  Carlsberg

Poor diversification

The 3 months correlation between Matas and Carlsberg is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Matas AS and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Matas 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 Matas 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 Matas AS i.e., Matas AS and Carlsberg go up and down completely randomly.

Pair Corralation between Matas AS and Carlsberg

Assuming the 90 days trading horizon Matas AS is expected to generate 2.63 times less return on investment than Carlsberg. But when comparing it to its historical volatility, Matas AS is 1.17 times less risky than Carlsberg. It trades about 0.11 of its potential returns per unit of risk. Carlsberg AS is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  71,500  in Carlsberg AS on December 4, 2024 and sell it today you would earn a total of  17,960  from holding Carlsberg AS or generate 25.12% return on investment over 90 days.

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

Matas AS  vs.  Carlsberg AS

Matas AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Matas AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Matas AS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Carlsberg AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Carlsberg sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Matas AS and Carlsberg

The main advantage of trading using opposite Matas AS and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matas 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 Matas 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .