Correlation Between Apple and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Apple and Heineken Holding 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 Apple and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Heineken Holding NV, you can compare the effects of market volatilities on Apple and Heineken Holding 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 Apple with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Heineken Holding.
Diversification Opportunities for Apple and Heineken Holding
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Apple and Heineken is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Apple 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 Apple Inc are associated (or correlated) with Heineken Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Holding has no effect on the direction of Apple i.e., Apple and Heineken Holding go up and down completely randomly.
Pair Corralation between Apple and Heineken Holding
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.23 times more return on investment than Heineken Holding. However, Apple is 1.23 times more volatile than Heineken Holding NV. It trades about 0.36 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.31 per unit of risk. If you would invest 20,575 in Apple Inc on September 1, 2024 and sell it today you would earn a total of 1,860 from holding Apple Inc or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Heineken Holding NV
Performance |
| Timeline |
| Apple Inc |
| Heineken Holding |
Apple and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Heineken Holding
The main advantage of trading using opposite Apple and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Heineken Holding 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 Holding will offset losses from the drop in Heineken Holding's long position.| Apple vs. Enter Air SA | Apple vs. Wayside Technology Group | Apple vs. DELTA AIR LINES | Apple vs. Align Technology |
| Heineken Holding vs. CyberArk Software | Heineken Holding vs. Take Two Interactive Software | Heineken Holding vs. NAKED WINES PLC | Heineken Holding vs. UNITED RENTALS |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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