Correlation Between PHI and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both PHI 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 PHI and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHI Group and Heineken Holding NV, you can compare the effects of market volatilities on PHI 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 PHI with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHI and Heineken Holding.
Diversification Opportunities for PHI and Heineken Holding
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PHI and Heineken is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PHI Group and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and PHI 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 PHI Group 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 PHI i.e., PHI and Heineken Holding go up and down completely randomly.
Pair Corralation between PHI and Heineken Holding
Given the investment horizon of 90 days PHI Group is expected to generate 16.83 times more return on investment than Heineken Holding. However, PHI is 16.83 times more volatile than Heineken Holding NV. It trades about 0.09 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.05 per unit of risk. If you would invest 0.06 in PHI Group on August 31, 2024 and sell it today you would lose (0.04) from holding PHI Group or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PHI Group vs. Heineken Holding NV
Performance |
| Timeline |
| PHI Group |
| Heineken Holding |
PHI and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHI and Heineken Holding
The main advantage of trading using opposite PHI and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHI 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 PHI Group 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. Barfresh Food Group | Heineken Holding vs. Fbec Worldwide | Heineken Holding vs. Flow Beverage Corp | Heineken Holding vs. Eq Energy Drink |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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