Correlation Between Heineken Bhd and Digistar Bhd
Can any of the company-specific risk be diversified away by investing in both Heineken Bhd and Digistar Bhd 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 Heineken Bhd and Digistar Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken Bhd and Digistar Bhd, you can compare the effects of market volatilities on Heineken Bhd and Digistar Bhd 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 Heineken Bhd with a short position of Digistar Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Bhd and Digistar Bhd.
Diversification Opportunities for Heineken Bhd and Digistar Bhd
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Heineken and Digistar is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Bhd and Digistar Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digistar Bhd and Heineken Bhd 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 Heineken Bhd are associated (or correlated) with Digistar Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digistar Bhd has no effect on the direction of Heineken Bhd i.e., Heineken Bhd and Digistar Bhd go up and down completely randomly.
Pair Corralation between Heineken Bhd and Digistar Bhd
Assuming the 90 days trading horizon Heineken Bhd is expected to generate 3.47 times less return on investment than Digistar Bhd. But when comparing it to its historical volatility, Heineken Bhd is 5.64 times less risky than Digistar Bhd. It trades about 0.15 of its potential returns per unit of risk. Digistar Bhd is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5.50 in Digistar Bhd on August 28, 2024 and sell it today you would earn a total of 0.50 from holding Digistar Bhd or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Heineken Bhd vs. Digistar Bhd
Performance |
| Timeline |
| Heineken Bhd |
| Digistar Bhd |
Heineken Bhd and Digistar Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken Bhd and Digistar Bhd
The main advantage of trading using opposite Heineken Bhd and Digistar Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Bhd position performs unexpectedly, Digistar Bhd 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 Digistar Bhd will offset losses from the drop in Digistar Bhd's long position.| Heineken Bhd vs. Digistar Bhd | Heineken Bhd vs. Minetech Resources Bhd | Heineken Bhd vs. OpenSys M Bhd | Heineken Bhd vs. Insas Bhd |
| Digistar Bhd vs. Malayan Banking Bhd | Digistar Bhd vs. Public Bank Bhd | Digistar Bhd vs. Petronas Chemicals Group | Digistar Bhd vs. Tenaga Nasional Bhd |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |