Correlation Between Heineken Bhd and SEAL Incorporated
Can any of the company-specific risk be diversified away by investing in both Heineken Bhd and SEAL Incorporated 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 SEAL Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken Bhd and SEAL Incorporated Bhd, you can compare the effects of market volatilities on Heineken Bhd and SEAL Incorporated 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 SEAL Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Bhd and SEAL Incorporated.
Diversification Opportunities for Heineken Bhd and SEAL Incorporated
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heineken and SEAL is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Bhd and SEAL Incorporated Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAL Incorporated 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 SEAL Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAL Incorporated Bhd has no effect on the direction of Heineken Bhd i.e., Heineken Bhd and SEAL Incorporated go up and down completely randomly.
Pair Corralation between Heineken Bhd and SEAL Incorporated
Assuming the 90 days trading horizon Heineken Bhd is expected to generate 0.74 times more return on investment than SEAL Incorporated. However, Heineken Bhd is 1.35 times less risky than SEAL Incorporated. It trades about 0.15 of its potential returns per unit of risk. SEAL Incorporated Bhd is currently generating about 0.1 per unit of risk. If you would invest 2,290 in Heineken Bhd on August 28, 2024 and sell it today you would earn a total of 84.00 from holding Heineken Bhd or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken Bhd vs. SEAL Incorporated Bhd
Performance |
| Timeline |
| Heineken Bhd |
| SEAL Incorporated Bhd |
Heineken Bhd and SEAL Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken Bhd and SEAL Incorporated
The main advantage of trading using opposite Heineken Bhd and SEAL Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Bhd position performs unexpectedly, SEAL Incorporated 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 SEAL Incorporated will offset losses from the drop in SEAL Incorporated'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 |
| SEAL Incorporated vs. Digistar Bhd | SEAL Incorporated vs. Minetech Resources Bhd | SEAL Incorporated vs. OpenSys M Bhd | SEAL Incorporated vs. Insas 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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