Correlation Between Orsted AS and Carlsberg

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

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

Diversification Opportunities for Orsted AS and Carlsberg

-0.19

Correlation Coefficient

Orsted AS  Carlsberg

Good diversification

The 3 months correlation between Orsted and Carlsberg is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Orsted 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 Orsted 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 Orsted AS i.e., Orsted AS and Carlsberg go up and down completely randomly.

Pair Corralation between Orsted AS and Carlsberg

Assuming the 90 days trading horizon Orsted AS is expected to under-perform the Carlsberg. In addition to that, Orsted AS is 2.17 times more volatile than Carlsberg AS. It trades about -0.03 of its total potential returns per unit of risk. Carlsberg AS is currently generating about 0.0 per unit of volatility. If you would invest  94,895  in Carlsberg AS on December 2, 2024 and sell it today you would lose (4,755) from holding Carlsberg AS or give up 5.01% of portfolio value over 90 days.

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

Orsted AS  vs.  Carlsberg AS

Orsted AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orsted 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Carlsberg AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carlsberg AS are ranked lower than 14 (%) 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 Orsted AS and Carlsberg

The main advantage of trading using opposite Orsted AS and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orsted 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 Orsted 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.