Correlation Between Carlsberg A/S and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Carlsberg A/S 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 Carlsberg A/S and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlsberg AS and Heineken Holding NV, you can compare the effects of market volatilities on Carlsberg A/S 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 Carlsberg A/S with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlsberg A/S and Heineken Holding.
Diversification Opportunities for Carlsberg A/S and Heineken Holding
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlsberg and Heineken is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Carlsberg AS and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Carlsberg A/S 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 Carlsberg AS 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 Carlsberg A/S i.e., Carlsberg A/S and Heineken Holding go up and down completely randomly.
Pair Corralation between Carlsberg A/S and Heineken Holding
Assuming the 90 days trading horizon Carlsberg AS is expected to under-perform the Heineken Holding. In addition to that, Carlsberg A/S is 1.76 times more volatile than Heineken Holding NV. It trades about -0.24 of its total potential returns per unit of risk. Heineken Holding NV is currently generating about -0.24 per unit of volatility. If you would invest 6,745 in Heineken Holding NV on August 28, 2024 and sell it today you would lose (720.00) from holding Heineken Holding NV or give up 10.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlsberg AS vs. Heineken Holding NV
Performance |
| Timeline |
| Carlsberg A/S |
| Heineken Holding |
Carlsberg A/S and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlsberg A/S and Heineken Holding
The main advantage of trading using opposite Carlsberg A/S and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlsberg A/S 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.| Carlsberg A/S vs. Monster Beverage Corp | Carlsberg A/S vs. CONAGRA FOODS | Carlsberg A/S vs. Dairy Farm International | Carlsberg A/S vs. AUSTEVOLL SEAFOOD |
| Heineken Holding vs. ITALIAN WINE BRANDS | Heineken Holding vs. VIRGIN WINES UK | Heineken Holding vs. Insurance Australia Group | Heineken Holding vs. Singapore Reinsurance |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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