Correlation Between Icad and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Icad and Heineken Holding 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 Icad and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between icad inc and Heineken Holding NV, you can compare the effects of market volatilities on Icad and Heineken Holding 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 Icad with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icad and Heineken Holding.
Diversification Opportunities for Icad and Heineken Holding
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Icad and Heineken is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding icad inc and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Icad 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 icad inc are associated (or correlated) with Heineken Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Holding has no effect on the direction of Icad i.e., Icad and Heineken Holding go up and down completely randomly.
Pair Corralation between Icad and Heineken Holding
Given the investment horizon of 90 days icad inc is expected to generate 2.66 times more return on investment than Heineken Holding. However, Icad is 2.66 times more volatile than Heineken Holding NV. It trades about 0.2 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.14 per unit of risk. If you would invest 174.00 in icad inc on October 7, 2024 and sell it today you would earn a total of 32.00 from holding icad inc or generate 18.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
icad inc vs. Heineken Holding NV
Performance |
| Timeline |
| icad inc |
| Heineken Holding |
Icad and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icad and Heineken Holding
The main advantage of trading using opposite Icad and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icad position performs unexpectedly, Heineken Holding 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 Holding will offset losses from the drop in Heineken Holding's long position.The idea behind icad inc and Heineken Holding NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Heineken Holding vs. Heineken NV | Heineken Holding vs. Anheuser Busch InBev SANV | Heineken Holding vs. Tsingtao Brewery Co | Heineken Holding vs. Carlsberg AS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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