Correlation Between Heineken Bhd and Protasco Bhd
Can any of the company-specific risk be diversified away by investing in both Heineken Bhd and Protasco 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 Protasco 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 Protasco Bhd, you can compare the effects of market volatilities on Heineken Bhd and Protasco 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 Protasco Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Bhd and Protasco Bhd.
Diversification Opportunities for Heineken Bhd and Protasco Bhd
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heineken and Protasco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Bhd and Protasco Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Protasco 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 Protasco Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Protasco Bhd has no effect on the direction of Heineken Bhd i.e., Heineken Bhd and Protasco Bhd go up and down completely randomly.
Pair Corralation between Heineken Bhd and Protasco Bhd
Assuming the 90 days trading horizon Heineken Bhd is expected to generate 0.27 times more return on investment than Protasco Bhd. However, Heineken Bhd is 3.69 times less risky than Protasco Bhd. It trades about 0.19 of its potential returns per unit of risk. Protasco Bhd is currently generating about 0.01 per unit of risk. If you would invest 2,392 in Heineken Bhd on October 20, 2024 and sell it today you would earn a total of 78.00 from holding Heineken Bhd or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken Bhd vs. Protasco Bhd
Performance |
| Timeline |
| Heineken Bhd |
| Protasco Bhd |
Heineken Bhd and Protasco Bhd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken Bhd and Protasco Bhd
The main advantage of trading using opposite Heineken Bhd and Protasco Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Bhd position performs unexpectedly, Protasco 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 Protasco Bhd will offset losses from the drop in Protasco Bhd's long position.| Heineken Bhd vs. Carlsberg Brewery Malaysia | Heineken Bhd vs. FARM FRESH BERHAD | Heineken Bhd vs. Digistar Bhd | Heineken Bhd vs. AirAsia X Bhd |
| Protasco Bhd vs. Sapura Industrial Bhd | Protasco Bhd vs. Sungei Bagan Rubber | Protasco Bhd vs. Mercury Industries Bhd | Protasco Bhd vs. Al Aqar Healthcare |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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