Correlation Between Carpenter Technology and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Carpenter Technology 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 Carpenter Technology and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carpenter Technology and Heineken Holding NV, you can compare the effects of market volatilities on Carpenter Technology 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 Carpenter Technology with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carpenter Technology and Heineken Holding.
Diversification Opportunities for Carpenter Technology and Heineken Holding
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carpenter and Heineken is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Carpenter Technology and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Carpenter Technology 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 Carpenter Technology 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 Carpenter Technology i.e., Carpenter Technology and Heineken Holding go up and down completely randomly.
Pair Corralation between Carpenter Technology and Heineken Holding
Considering the 90-day investment horizon Carpenter Technology is expected to under-perform the Heineken Holding. In addition to that, Carpenter Technology is 1.24 times more volatile than Heineken Holding NV. It trades about -0.15 of its total potential returns per unit of risk. Heineken Holding NV is currently generating about -0.14 per unit of volatility. If you would invest 6,209 in Heineken Holding NV on October 7, 2024 and sell it today you would lose (332.00) from holding Heineken Holding NV or give up 5.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carpenter Technology vs. Heineken Holding NV
Performance |
| Timeline |
| Carpenter Technology |
| Heineken Holding |
Carpenter Technology and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carpenter Technology and Heineken Holding
The main advantage of trading using opposite Carpenter Technology and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carpenter Technology 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.| Carpenter Technology vs. Worthington Industries | Carpenter Technology vs. Ryerson Holding Corp | Carpenter Technology vs. Mueller Industries | Carpenter Technology vs. Allegheny Technologies Incorporated |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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