Correlation Between Compania Cervecerias and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Compania Cervecerias 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 Compania Cervecerias and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compania Cervecerias Unidas and Heineken Holding NV, you can compare the effects of market volatilities on Compania Cervecerias 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 Compania Cervecerias with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compania Cervecerias and Heineken Holding.
Diversification Opportunities for Compania Cervecerias and Heineken Holding
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Compania and Heineken is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Compania Cervecerias Unidas and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Compania Cervecerias 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 Compania Cervecerias Unidas 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 Compania Cervecerias i.e., Compania Cervecerias and Heineken Holding go up and down completely randomly.
Pair Corralation between Compania Cervecerias and Heineken Holding
Considering the 90-day investment horizon Compania Cervecerias Unidas is expected to generate 0.71 times more return on investment than Heineken Holding. However, Compania Cervecerias Unidas is 1.41 times less risky than Heineken Holding. It trades about 0.33 of its potential returns per unit of risk. Heineken Holding NV is currently generating about 0.15 per unit of risk. If you would invest 1,141 in Compania Cervecerias Unidas on November 2, 2024 and sell it today you would earn a total of 70.00 from holding Compania Cervecerias Unidas or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compania Cervecerias Unidas vs. Heineken Holding NV
Performance |
| Timeline |
| Compania Cervecerias |
| Heineken Holding |
Compania Cervecerias and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compania Cervecerias and Heineken Holding
The main advantage of trading using opposite Compania Cervecerias and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compania Cervecerias 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.| Compania Cervecerias vs. Boston Beer | Compania Cervecerias vs. Molson Coors Beverage | Compania Cervecerias vs. Ambev SA ADR | Compania Cervecerias vs. Molson Coors Brewing |
| Heineken Holding vs. Heineken NV | Heineken Holding vs. Anheuser Busch InBev SANV | Heineken Holding vs. Tsingtao Brewery Co | Heineken Holding vs. Carlsberg AS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |