Correlation Between Superior Plus and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Carlsberg AS, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Carlsberg.
Diversification Opportunities for Superior Plus and Carlsberg
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Superior and Carlsberg is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Carlsberg go up and down completely randomly.
Pair Corralation between Superior Plus and Carlsberg
Assuming the 90 days horizon Superior Plus Corp is expected to generate 2.18 times more return on investment than Carlsberg. However, Superior Plus is 2.18 times more volatile than Carlsberg AS. It trades about -0.03 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.08 per unit of risk. If you would invest 487.00 in Superior Plus Corp on September 14, 2024 and sell it today you would lose (43.00) from holding Superior Plus Corp or give up 8.83% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Superior Plus Corp vs. Carlsberg AS
Performance |
Timeline |
Superior Plus Corp |
Carlsberg AS |
Superior Plus and Carlsberg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Superior Plus and Carlsberg
The main advantage of trading using opposite Superior Plus and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.Superior Plus vs. Boiron SA | Superior Plus vs. COSMOSTEEL HLDGS | Superior Plus vs. Vastned Retail NV | Superior Plus vs. BURLINGTON STORES |
Carlsberg vs. Superior Plus Corp | Carlsberg vs. SIVERS SEMICONDUCTORS AB | Carlsberg vs. NorAm Drilling AS | Carlsberg vs. Norsk Hydro ASA |
Check out your portfolio center.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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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