Correlation Between Visa and Carlsberg
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Carlsberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Carlsberg AS, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Carlsberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Carlsberg.
Diversification Opportunities for Visa and Carlsberg
Very good diversification
The 3 months correlation between Visa and Carlsberg is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Visa 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 Visa Class A 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 Visa i.e., Visa and Carlsberg go up and down completely randomly.
Pair Corralation between Visa and Carlsberg
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.46 times more return on investment than Carlsberg. However, Visa Class A is 2.18 times less risky than Carlsberg. It trades about 0.01 of its potential returns per unit of risk. Carlsberg AS is currently generating about -0.06 per unit of risk. If you would invest 27,114 in Visa Class A on January 24, 2024 and sell it today you would earn a total of 119.00 from holding Visa Class A or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Visa Class A vs. Carlsberg AS
Performance |
| Timeline |
| Visa Class A |
| Carlsberg AS |
Visa and Carlsberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Carlsberg
The main advantage of trading using opposite Visa and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
| Carlsberg vs. AP Mller | Carlsberg vs. ROCKWOOL International AS | Carlsberg vs. Royal Unibrew AS | Carlsberg vs. Tryg AS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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