Correlation Between Global E and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Global E 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 Global E and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global E Online and Heineken Holding NV, you can compare the effects of market volatilities on Global E 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 Global E with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global E and Heineken Holding.
Diversification Opportunities for Global E and Heineken Holding
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Heineken is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Global E 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 Global E Online 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 Global E i.e., Global E and Heineken Holding go up and down completely randomly.
Pair Corralation between Global E and Heineken Holding
Given the investment horizon of 90 days Global E Online is expected to generate 0.62 times more return on investment than Heineken Holding. However, Global E Online is 1.61 times less risky than Heineken Holding. It trades about 0.1 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.03 per unit of risk. If you would invest 5,464 in Global E Online on October 22, 2024 and sell it today you would earn a total of 146.00 from holding Global E Online or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Global E Online vs. Heineken Holding NV
Performance |
| Timeline |
| Global E Online |
| Heineken Holding |
Global E and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global E and Heineken Holding
The main advantage of trading using opposite Global E and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E 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.| Global E vs. MercadoLibre | Global E vs. PDD Holdings | Global E vs. JD Inc Adr | Global E vs. Alibaba Group Holding |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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