Correlation Between Remy Cointreau and Heineken Holding
Can any of the company-specific risk be diversified away by investing in both Remy Cointreau 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 Remy Cointreau and Heineken Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Remy Cointreau SA and Heineken Holding NV, you can compare the effects of market volatilities on Remy Cointreau 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 Remy Cointreau with a short position of Heineken Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Remy Cointreau and Heineken Holding.
Diversification Opportunities for Remy Cointreau and Heineken Holding
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Remy and Heineken is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Remy Cointreau SA and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Remy Cointreau 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 Remy Cointreau SA 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 Remy Cointreau i.e., Remy Cointreau and Heineken Holding go up and down completely randomly.
Pair Corralation between Remy Cointreau and Heineken Holding
Assuming the 90 days horizon Remy Cointreau SA is expected to generate 1.49 times more return on investment than Heineken Holding. However, Remy Cointreau is 1.49 times more volatile than Heineken Holding NV. It trades about 0.35 of its potential returns per unit of risk. Heineken Holding NV is currently generating about -0.24 per unit of risk. If you would invest 576.00 in Remy Cointreau SA on September 13, 2024 and sell it today you would earn a total of 87.00 from holding Remy Cointreau SA or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Remy Cointreau SA vs. Heineken Holding NV
Performance |
| Timeline |
| Remy Cointreau SA |
| Heineken Holding |
Remy Cointreau and Heineken Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Remy Cointreau and Heineken Holding
The main advantage of trading using opposite Remy Cointreau and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Remy Cointreau 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.| Remy Cointreau vs. Andrew Peller Limited | Remy Cointreau vs. Aristocrat Group Corp | Remy Cointreau vs. Iconic Brands | Remy Cointreau vs. Naked Wines plc |
| Heineken Holding vs. Anheuser Busch InBev SANV | Heineken Holding vs. Anheuser Busch Inbev | Heineken Holding vs. Molson Coors Brewing | Heineken Holding vs. Heineken 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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