Correlation Between Nilfisk Holding and Carlsberg

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

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

Diversification Opportunities for Nilfisk Holding and Carlsberg

-0.34

Correlation Coefficient

Nilfisk Holding  Carlsberg

Very good diversification

The 3 months correlation between Nilfisk and Carlsberg is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nilfisk Holding AS and Carlsberg AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS and Nilfisk Holding 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 Nilfisk Holding AS 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 Nilfisk Holding i.e., Nilfisk Holding and Carlsberg go up and down completely randomly.

Pair Corralation between Nilfisk Holding and Carlsberg

Assuming the 90 days trading horizon Nilfisk Holding AS is expected to under-perform the Carlsberg. But the stock apears to be less risky and, when comparing its historical volatility, Nilfisk Holding AS is 1.18 times less risky than Carlsberg. The stock trades about -0.15 of its potential returns per unit of risk. The Carlsberg AS is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  111,500  in Carlsberg AS on February 15, 2024 and sell it today you would earn a total of  4,500  from holding Carlsberg AS or generate 4.04% return on investment over 90 days.

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

Nilfisk Holding AS  vs.  Carlsberg AS

Nilfisk Holding AS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nilfisk Holding AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward-looking signals, Nilfisk Holding may actually be approaching a critical reversion point that can send shares even higher in June 2024.

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 weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nilfisk Holding and Carlsberg

The main advantage of trading using opposite Nilfisk Holding and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nilfisk Holding 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 Nilfisk Holding AS 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.