Correlation Between SHIP HEALTHCARE and HEINEKEN
Can any of the company-specific risk be diversified away by investing in both SHIP HEALTHCARE and HEINEKEN 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 SHIP HEALTHCARE and HEINEKEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SHIP HEALTHCARE HLDGINC and HEINEKEN SP ADR, you can compare the effects of market volatilities on SHIP HEALTHCARE and HEINEKEN 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 SHIP HEALTHCARE with a short position of HEINEKEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHIP HEALTHCARE and HEINEKEN.
Diversification Opportunities for SHIP HEALTHCARE and HEINEKEN
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SHIP and HEINEKEN is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and HEINEKEN SP ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEINEKEN SP ADR and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC are associated (or correlated) with HEINEKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEINEKEN SP ADR has no effect on the direction of SHIP HEALTHCARE i.e., SHIP HEALTHCARE and HEINEKEN go up and down completely randomly.
Pair Corralation between SHIP HEALTHCARE and HEINEKEN
Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to generate 3.14 times more return on investment than HEINEKEN. However, SHIP HEALTHCARE is 3.14 times more volatile than HEINEKEN SP ADR. It trades about 0.07 of its potential returns per unit of risk. HEINEKEN SP ADR is currently generating about -0.06 per unit of risk. If you would invest 824.00 in SHIP HEALTHCARE HLDGINC on September 4, 2024 and sell it today you would earn a total of 546.00 from holding SHIP HEALTHCARE HLDGINC or generate 66.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SHIP HEALTHCARE HLDGINC vs. HEINEKEN SP ADR
Performance |
| Timeline |
| SHIP HEALTHCARE HLDGINC |
| HEINEKEN SP ADR |
SHIP HEALTHCARE and HEINEKEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SHIP HEALTHCARE and HEINEKEN
The main advantage of trading using opposite SHIP HEALTHCARE and HEINEKEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE position performs unexpectedly, HEINEKEN 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 HEINEKEN will offset losses from the drop in HEINEKEN's long position.| SHIP HEALTHCARE vs. THRACE PLASTICS | SHIP HEALTHCARE vs. Rayonier Advanced Materials | SHIP HEALTHCARE vs. SANOK RUBBER ZY | SHIP HEALTHCARE vs. Gruppo Mutuionline SpA |
| HEINEKEN vs. EPSILON HEALTHCARE LTD | HEINEKEN vs. Sabra Health Care | HEINEKEN vs. National Health Investors | HEINEKEN vs. SHIP HEALTHCARE HLDGINC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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