Correlation Between Heineken Bhd and XL Holdings
Can any of the company-specific risk be diversified away by investing in both Heineken Bhd and XL Holdings 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 Heineken Bhd and XL Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken Bhd and XL Holdings Bhd, you can compare the effects of market volatilities on Heineken Bhd and XL Holdings 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 Heineken Bhd with a short position of XL Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Bhd and XL Holdings.
Diversification Opportunities for Heineken Bhd and XL Holdings
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Heineken and 7121 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Bhd and XL Holdings Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XL Holdings Bhd and Heineken Bhd 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 Heineken Bhd are associated (or correlated) with XL Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XL Holdings Bhd has no effect on the direction of Heineken Bhd i.e., Heineken Bhd and XL Holdings go up and down completely randomly.
Pair Corralation between Heineken Bhd and XL Holdings
Assuming the 90 days trading horizon Heineken Bhd is expected to generate 1.21 times less return on investment than XL Holdings. In addition to that, Heineken Bhd is 1.35 times more volatile than XL Holdings Bhd. It trades about 0.13 of its total potential returns per unit of risk. XL Holdings Bhd is currently generating about 0.22 per unit of volatility. If you would invest 51.00 in XL Holdings Bhd on September 24, 2024 and sell it today you would earn a total of 1.00 from holding XL Holdings Bhd or generate 1.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Heineken Bhd vs. XL Holdings Bhd
Performance |
Timeline |
Heineken Bhd |
XL Holdings Bhd |
Heineken Bhd and XL Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Heineken Bhd and XL Holdings
The main advantage of trading using opposite Heineken Bhd and XL Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Bhd position performs unexpectedly, XL Holdings 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 XL Holdings will offset losses from the drop in XL Holdings' long position.Heineken Bhd vs. Carlsberg Brewery Malaysia | Heineken Bhd vs. Genetec Technology Bhd | Heineken Bhd vs. Sunway Construction Group | Heineken Bhd vs. Dagang Nexchange Bhd |
XL Holdings vs. Malayan Banking Bhd | XL Holdings vs. Public Bank Bhd | XL Holdings vs. Petronas Chemicals Group | XL Holdings vs. Tenaga Nasional Bhd |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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