Correlation Between NAKED WINES and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both NAKED WINES 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 NAKED WINES and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NAKED WINES PLC and Heineken Holding NV, you can compare the effects of market volatilities on NAKED WINES 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 NAKED WINES with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of NAKED WINES and Heineken Holding.
Diversification Opportunities for NAKED WINES and Heineken Holding
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between NAKED and Heineken is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NAKED WINES PLC and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and NAKED WINES 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 NAKED WINES PLC 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 NAKED WINES i.e., NAKED WINES and Heineken Holding go up and down completely randomly.
Pair Corralation between NAKED WINES and Heineken Holding
Assuming the 90 days horizon NAKED WINES PLC is expected to under-perform the Heineken Holding. In addition to that, NAKED WINES is 3.19 times more volatile than Heineken Holding NV. It trades about -0.15 of its total potential returns per unit of risk. Heineken Holding NV is currently generating about -0.34 per unit of volatility. If you would invest 6,380 in Heineken Holding NV on September 3, 2024 and sell it today you would lose (405.00) from holding Heineken Holding NV or give up 6.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NAKED WINES PLC vs. Heineken Holding NV
Performance |
| Timeline |
| NAKED WINES PLC |
| Heineken Holding |
NAKED WINES and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NAKED WINES and Heineken Holding
The main advantage of trading using opposite NAKED WINES and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NAKED WINES 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.| NAKED WINES vs. CHINA TONTINE WINES | NAKED WINES vs. Superior Plus Corp | NAKED WINES vs. NMI Holdings | NAKED WINES vs. Origin Agritech |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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