Correlation Between Intel and Heineken
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and Heineken into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Heineken NV, you can compare the effects of market volatilities on Intel 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 Intel with a short position of Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Heineken.
Diversification Opportunities for Intel and Heineken
Pay attention - limited upside
The 3 months correlation between Intel and Heineken is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV and Intel 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 Intel 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 Intel i.e., Intel and Heineken go up and down completely randomly.
Pair Corralation between Intel and Heineken
Given the investment horizon of 90 days Intel is expected to generate 2.65 times more return on investment than Heineken. However, Intel is 2.65 times more volatile than Heineken NV. It trades about -0.02 of its potential returns per unit of risk. Heineken NV is currently generating about -0.16 per unit of risk. If you would invest 2,994 in Intel on August 27, 2024 and sell it today you would lose (544.00) from holding Intel or give up 18.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Heineken NV
Performance |
| Timeline |
| Intel |
| Heineken NV |
Intel and Heineken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Heineken
The main advantage of trading using opposite Intel and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| Heineken vs. Anheuser Busch InBev SANV | Heineken vs. Tsingtao Brewery Co | Heineken vs. Carlsberg AS | Heineken vs. Heineken Holding NV |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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