Correlation Between HEALTHCARE REAL and Heineken
Can any of the company-specific risk be diversified away by investing in both HEALTHCARE REAL and Heineken 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 HEALTHCARE REAL and Heineken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHCARE REAL A and Heineken NV, you can compare the effects of market volatilities on HEALTHCARE REAL and Heineken 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 HEALTHCARE REAL with a short position of Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE REAL and Heineken.
Diversification Opportunities for HEALTHCARE REAL and Heineken
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HEALTHCARE and Heineken is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE REAL A and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV and HEALTHCARE REAL 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 HEALTHCARE REAL A are associated (or correlated) with Heineken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken NV has no effect on the direction of HEALTHCARE REAL i.e., HEALTHCARE REAL and Heineken go up and down completely randomly.
Pair Corralation between HEALTHCARE REAL and Heineken
Assuming the 90 days horizon HEALTHCARE REAL A is expected to generate 1.56 times more return on investment than Heineken. However, HEALTHCARE REAL is 1.56 times more volatile than Heineken NV. It trades about 0.03 of its potential returns per unit of risk. Heineken NV is currently generating about -0.56 per unit of risk. If you would invest 1,639 in HEALTHCARE REAL A on August 25, 2024 and sell it today you would earn a total of 11.00 from holding HEALTHCARE REAL A or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HEALTHCARE REAL A vs. Heineken NV
Performance |
| Timeline |
| HEALTHCARE REAL A |
| Heineken NV |
HEALTHCARE REAL and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHCARE REAL and Heineken
The main advantage of trading using opposite HEALTHCARE REAL and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHCARE REAL position performs unexpectedly, Heineken 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 will offset losses from the drop in Heineken's long position.| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc |
| Heineken vs. Plastic Omnium | Heineken vs. Diamondrock Hospitality Co | Heineken vs. HEALTHCARE REAL A | Heineken vs. Cardinal Health |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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