Correlation Between Heineken and Wolters Kluwer
Can any of the company-specific risk be diversified away by investing in both Heineken and Wolters Kluwer 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 Heineken and Wolters Kluwer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken and Wolters Kluwer NV, you can compare the effects of market volatilities on Heineken and Wolters Kluwer 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 Heineken with a short position of Wolters Kluwer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken and Wolters Kluwer.
Diversification Opportunities for Heineken and Wolters Kluwer
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heineken and Wolters is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Heineken and Wolters Kluwer NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wolters Kluwer NV and Heineken 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 Heineken are associated (or correlated) with Wolters Kluwer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wolters Kluwer NV has no effect on the direction of Heineken i.e., Heineken and Wolters Kluwer go up and down completely randomly.
Pair Corralation between Heineken and Wolters Kluwer
Assuming the 90 days trading horizon Heineken is expected to under-perform the Wolters Kluwer. In addition to that, Heineken is 1.1 times more volatile than Wolters Kluwer NV. It trades about -0.03 of its total potential returns per unit of risk. Wolters Kluwer NV is currently generating about 0.09 per unit of volatility. If you would invest 10,136 in Wolters Kluwer NV on September 2, 2024 and sell it today you would earn a total of 5,659 from holding Wolters Kluwer NV or generate 55.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken vs. Wolters Kluwer NV
Performance |
| Timeline |
| Heineken |
| Wolters Kluwer NV |
Heineken and Wolters Kluwer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken and Wolters Kluwer
The main advantage of trading using opposite Heineken and Wolters Kluwer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken position performs unexpectedly, Wolters Kluwer 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 Wolters Kluwer will offset losses from the drop in Wolters Kluwer's long position.| Heineken vs. Unilever PLC | Heineken vs. Koninklijke Philips NV | Heineken vs. Akzo Nobel NV | Heineken vs. Koninklijke Ahold Delhaize |
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 Stocks Directory module to find actively traded stocks across global markets.
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