Correlation Between Heineken Holding and Anheuser-Busch InBev
Can any of the company-specific risk be diversified away by investing in both Heineken Holding and Anheuser-Busch InBev 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 Anheuser-Busch InBev 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 Anheuser Busch InBev SANV, you can compare the effects of market volatilities on Heineken Holding and Anheuser-Busch InBev 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 Anheuser-Busch InBev. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Holding and Anheuser-Busch InBev.
Diversification Opportunities for Heineken Holding and Anheuser-Busch InBev
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heineken and Anheuser-Busch is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Holding NV and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev 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 Anheuser-Busch InBev. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of Heineken Holding i.e., Heineken Holding and Anheuser-Busch InBev go up and down completely randomly.
Pair Corralation between Heineken Holding and Anheuser-Busch InBev
Assuming the 90 days horizon Heineken Holding NV is expected to generate 0.89 times more return on investment than Anheuser-Busch InBev. However, Heineken Holding NV is 1.12 times less risky than Anheuser-Busch InBev. It trades about -0.34 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.41 per unit of risk. If you would invest 3,517 in Heineken Holding NV on August 31, 2024 and sell it today you would lose (354.00) from holding Heineken Holding NV or give up 10.07% 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. Anheuser Busch InBev SANV
Performance |
| Timeline |
| Heineken Holding |
| Anheuser Busch InBev |
Heineken Holding and Anheuser-Busch InBev Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken Holding and Anheuser-Busch InBev
The main advantage of trading using opposite Heineken Holding and Anheuser-Busch InBev positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Holding position performs unexpectedly, Anheuser-Busch InBev 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 Anheuser-Busch InBev will offset losses from the drop in Anheuser-Busch InBev's long position.| Heineken Holding vs. Barfresh Food Group | Heineken Holding vs. Fbec Worldwide | Heineken Holding vs. Flow Beverage Corp | Heineken Holding vs. Eq Energy Drink |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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