Correlation Between Ford and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Heineken Holding NV, you can compare the effects of market volatilities on Ford 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 Ford with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Heineken Holding.
Diversification Opportunities for Ford and Heineken Holding
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ford and Heineken is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Ford 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 Ford Motor 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 Ford i.e., Ford and Heineken Holding go up and down completely randomly.
Pair Corralation between Ford and Heineken Holding
Taking into account the 90-day investment horizon Ford Motor is expected to generate 2.17 times more return on investment than Heineken Holding. However, Ford is 2.17 times more volatile than Heineken Holding NV. It trades about -0.01 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.12 per unit of risk. If you would invest 1,200 in Ford Motor on September 3, 2024 and sell it today you would lose (87.00) from holding Ford Motor or give up 7.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
Ford Motor vs. Heineken Holding NV
Performance |
| Timeline |
| Ford Motor |
| Heineken Holding |
Ford and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Heineken Holding
The main advantage of trading using opposite Ford and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
| Heineken Holding vs. WillScot Mobile Mini | Heineken Holding vs. MAROC TELECOM | Heineken Holding vs. Entravision Communications | Heineken Holding vs. Singapore Telecommunications Limited |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |