Correlation Between EHEALTH and Carlsberg

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

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

Diversification Opportunities for EHEALTH and Carlsberg

-0.75

Correlation Coefficient

EHEALTH  Carlsberg

Pay attention - limited upside

The 3 months correlation between EHEALTH and Carlsberg is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and Carlsberg go up and down completely randomly.

Pair Corralation between EHEALTH and Carlsberg

Assuming the 90 days trading horizon EHEALTH is expected to generate 2.82 times more return on investment than Carlsberg. However, EHEALTH is 2.82 times more volatile than Carlsberg AS. It trades about 0.04 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.12 per unit of risk. If you would invest  481.00  in EHEALTH on September 13, 2024 and sell it today you would earn a total of  54.00  from holding EHEALTH or generate 11.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.34%
Values	Daily Returns

EHEALTH  vs.  Carlsberg AS

EHEALTH

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EHEALTH are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, EHEALTH exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with EHEALTH and Carlsberg

The main advantage of trading using opposite EHEALTH and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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 EHEALTH 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.