Correlation Between Carlsberg and Danske Andelskassers

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

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

Diversification Opportunities for Carlsberg and Danske Andelskassers

-0.4

Correlation Coefficient

Carlsberg  Danske Andelskassers

Very good diversification

The 3 months correlation between Carlsberg and Danske is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Danske Andelskassers Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danske Andelskassers Bank and Carlsberg 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 Carlsberg AS are associated (or correlated) with Danske Andelskassers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danske Andelskassers Bank has no effect on the direction of Carlsberg i.e., Carlsberg and Danske Andelskassers go up and down completely randomly.

Pair Corralation between Carlsberg and Danske Andelskassers

Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Danske Andelskassers. In addition to that, Carlsberg is 1.42 times more volatile than Danske Andelskassers Bank. It trades about -0.25 of its total potential returns per unit of risk. Danske Andelskassers Bank is currently generating about 0.01 per unit of volatility. If you would invest  1,280  in Danske Andelskassers Bank on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Danske Andelskassers Bank or generate 0.0% return on investment over 90 days.

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

Carlsberg AS  vs.  Danske Andelskassers Bank

Carlsberg AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlsberg AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Danske Andelskassers Bank

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Danske Andelskassers Bank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Danske Andelskassers may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Carlsberg and Danske Andelskassers

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

The idea behind Carlsberg AS and Danske Andelskassers Bank 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.