Correlation Between DAX Index and Heineken Holding
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By analyzing existing cross correlation between DAX Index and Heineken Holding NV, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Heineken Holding.
Diversification Opportunities for DAX Index and Heineken Holding
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAX and Heineken is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Heineken Holding go up and down completely randomly.
Pair Corralation between DAX Index and Heineken Holding
Assuming the 90 days trading horizon DAX Index is expected to generate 0.93 times more return on investment than Heineken Holding. However, DAX Index is 1.08 times less risky than Heineken Holding. It trades about -0.05 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.48 per unit of risk. If you would invest 1,953,162 in DAX Index on August 29, 2024 and sell it today you would lose (23,564) from holding DAX Index or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Heineken Holding NV
Performance |
| Timeline |
DAX Index and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Heineken Holding NV
Pair trading matchups for Heineken Holding
Pair Trading with DAX Index and Heineken Holding
The main advantage of trading using opposite DAX Index and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. ELMOS SEMICONDUCTOR | DAX Index vs. ALTAIR RES INC | DAX Index vs. Fair Isaac Corp | DAX Index vs. Taiwan Semiconductor Manufacturing |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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