Correlation Between Carlsberg and Apple
Can any of the company-specific risk be diversified away by investing in both Carlsberg and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Apple Inc, you can compare the effects of market volatilities on Carlsberg and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg and Apple.
Diversification Opportunities for Carlsberg and Apple
Excellent diversification
The 3 months correlation between Carlsberg and Apple is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Carlsberg i.e., Carlsberg and Apple go up and down completely randomly.
Pair Corralation between Carlsberg and Apple
Assuming the 90 days horizon Carlsberg AS is expected to generate 1.21 times more return on investment than Apple. However, Carlsberg is 1.21 times more volatile than Apple Inc. It trades about -0.08 of its potential returns per unit of risk. Apple Inc is currently generating about -0.19 per unit of risk. If you would invest 13,120 in Carlsberg AS on January 20, 2024 and sell it today you would lose (505.00) from holding Carlsberg AS or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Carlsberg AS vs. Apple Inc
Performance |
| Timeline |
| Carlsberg AS |
| Apple Inc |
Carlsberg and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg and Apple
The main advantage of trading using opposite Carlsberg and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Carlsberg vs. Compania Cervecerias Unidas | Carlsberg vs. Boston Beer | Carlsberg vs. Molson Coors Beverage | Carlsberg vs. Ambev SA ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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