Correlation Between Fulcrum Metals and Carlsberg

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

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

Diversification Opportunities for Fulcrum Metals and Carlsberg

0.4

Correlation Coefficient

Fulcrum Metals  Carlsberg

Very weak diversification

The 3 months correlation between Fulcrum and Carlsberg is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fulcrum Metals PLC and Carlsberg AS B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlsberg AS B and Fulcrum Metals 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 Fulcrum Metals PLC 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 B has no effect on the direction of Fulcrum Metals i.e., Fulcrum Metals and Carlsberg go up and down completely randomly.

Pair Corralation between Fulcrum Metals and Carlsberg

Assuming the 90 days trading horizon Fulcrum Metals PLC is expected to generate 0.57 times more return on investment than Carlsberg. However, Fulcrum Metals PLC is 1.76 times less risky than Carlsberg. It trades about 0.01 of its potential returns per unit of risk. Carlsberg AS B is currently generating about -0.14 per unit of risk. If you would invest  750.00  in Fulcrum Metals PLC on August 28, 2024 and sell it today you would earn a total of  0.00  from holding Fulcrum Metals PLC or generate 0.0% return on investment over 90 days.

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

Fulcrum Metals PLC  vs.  Carlsberg AS B

Fulcrum Metals PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulcrum Metals PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Carlsberg AS B

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carlsberg AS B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Carlsberg is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fulcrum Metals and Carlsberg

The main advantage of trading using opposite Fulcrum Metals and Carlsberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulcrum Metals 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 Fulcrum Metals PLC and Carlsberg AS B 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.