Correlation Between Heineken and Asahi Group
Can any of the company-specific risk be diversified away by investing in both Heineken and Asahi Group 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 Asahi Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken NV and Asahi Group Holdings, you can compare the effects of market volatilities on Heineken and Asahi Group 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 Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken and Asahi Group.
Diversification Opportunities for Heineken and Asahi Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Heineken and Asahi is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Heineken NV and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings 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 NV are associated (or correlated) with Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of Heineken i.e., Heineken and Asahi Group go up and down completely randomly.
Pair Corralation between Heineken and Asahi Group
Assuming the 90 days trading horizon Heineken NV is expected to under-perform the Asahi Group. But the stock apears to be less risky and, when comparing its historical volatility, Heineken NV is 2.52 times less risky than Asahi Group. The stock trades about -0.33 of its potential returns per unit of risk. The Asahi Group Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,078 in Asahi Group Holdings on September 1, 2024 and sell it today you would lose (43.00) from holding Asahi Group Holdings or give up 3.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heineken NV vs. Asahi Group Holdings
Performance |
| Timeline |
| Heineken NV |
| Asahi Group Holdings |
Heineken and Asahi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heineken and Asahi Group
The main advantage of trading using opposite Heineken and Asahi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken position performs unexpectedly, Asahi Group 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 Asahi Group will offset losses from the drop in Asahi Group's long position.| Heineken vs. Lamar Advertising | Heineken vs. FORWARD AIR P | Heineken vs. Carsales | Heineken vs. YATRA ONLINE DL 0001 |
| Asahi Group vs. AOI Electronics Co | Asahi Group vs. BYD ELECTRONIC | Asahi Group vs. UMC Electronics Co | Asahi Group vs. Geely Automobile Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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