Correlation Between Royal Unibrew and Matas AS

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

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

Diversification Opportunities for Royal Unibrew and Matas AS

-0.28

Correlation Coefficient

Royal Unibrew  Matas AS

Very good diversification

The 3 months correlation between Royal and Matas is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Royal Unibrew AS and Matas AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matas AS and Royal Unibrew 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 Royal Unibrew AS are associated (or correlated) with Matas AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matas AS has no effect on the direction of Royal Unibrew i.e., Royal Unibrew and Matas AS go up and down completely randomly.

Pair Corralation between Royal Unibrew and Matas AS

Assuming the 90 days trading horizon Royal Unibrew AS is expected to under-perform the Matas AS. But the stock apears to be less risky and, when comparing its historical volatility, Royal Unibrew AS is 1.05 times less risky than Matas AS. The stock trades about -0.08 of its potential returns per unit of risk. The Matas AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  12,280  in Matas AS on September 15, 2024 and sell it today you would earn a total of  940.00  from holding Matas AS or generate 7.65% return on investment over 90 days.

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

Royal Unibrew AS  vs.  Matas AS

Royal Unibrew AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Royal Unibrew AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Matas AS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Matas AS are ranked lower than 6 (%) 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 January 2025.

Pair Trading with Royal Unibrew and Matas AS

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

The idea behind Royal Unibrew AS and Matas 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.