Correlation Between Heineken Holding and Teleperformance
Can any of the company-specific risk be diversified away by investing in both Heineken Holding and Teleperformance 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 Holding and Teleperformance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken Holding NV and Teleperformance SE, you can compare the effects of market volatilities on Heineken Holding and Teleperformance 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 Holding with a short position of Teleperformance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Holding and Teleperformance.
Diversification Opportunities for Heineken Holding and Teleperformance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heineken and Teleperformance is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Holding NV and Teleperformance SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleperformance SE and Heineken Holding 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 Holding NV are associated (or correlated) with Teleperformance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleperformance SE has no effect on the direction of Heineken Holding i.e., Heineken Holding and Teleperformance go up and down completely randomly.
Pair Corralation between Heineken Holding and Teleperformance
Assuming the 90 days horizon Heineken Holding NV is expected to under-perform the Teleperformance. But the otc stock apears to be less risky and, when comparing its historical volatility, Heineken Holding NV is 1.31 times less risky than Teleperformance. The otc stock trades about -0.1 of its potential returns per unit of risk. The Teleperformance SE is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 10,873 in Teleperformance SE on November 2, 2024 and sell it today you would lose (1,243) from holding Teleperformance SE or give up 11.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken Holding NV vs. Teleperformance SE
Performance |
| Timeline |
| Heineken Holding |
| Teleperformance SE |
Heineken Holding and Teleperformance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken Holding and Teleperformance
The main advantage of trading using opposite Heineken Holding and Teleperformance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Holding position performs unexpectedly, Teleperformance 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 Teleperformance will offset losses from the drop in Teleperformance's long position.| Heineken Holding vs. Heineken NV | Heineken Holding vs. Anheuser Busch InBev SANV | Heineken Holding vs. Tsingtao Brewery Co | Heineken Holding vs. Carlsberg AS |
| Teleperformance vs. Teleperformance PK | Teleperformance vs. SMC Corp | Teleperformance vs. Schindler Holding AG | Teleperformance vs. Straumann Holding AG |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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