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
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Apple and Heineken is 0.2. 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 under-perform the Heineken Holding. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.27 times less risky than Heineken Holding. The stock trades about -0.08 of its potential returns per unit of risk. The Heineken Holding NV is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,785 in Heineken Holding NV on November 30, 2024 and sell it today you would earn a total of 1,230 from holding Heineken Holding NV or generate 21.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very 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. CAREER EDUCATION | Apple vs. Grand Canyon Education | Apple vs. Information Services International Dentsu | Apple vs. STRAYER EDUCATION |
| Heineken Holding vs. ELMOS SEMICONDUCTOR | Heineken Holding vs. Nordic Semiconductor ASA | Heineken Holding vs. Samsung Electronics Co | Heineken Holding vs. Renesas Electronics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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