Correlation Between Omesti Bhd and Heineken Bhd
Can any of the company-specific risk be diversified away by investing in both Omesti Bhd and Heineken Bhd 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 Omesti Bhd and Heineken Bhd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omesti Bhd and Heineken Bhd, you can compare the effects of market volatilities on Omesti Bhd and Heineken Bhd 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 Omesti Bhd with a short position of Heineken Bhd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omesti Bhd and Heineken Bhd.
Diversification Opportunities for Omesti Bhd and Heineken Bhd
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omesti and Heineken is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Omesti Bhd and Heineken Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Bhd and Omesti 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 Omesti Bhd are associated (or correlated) with Heineken Bhd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heineken Bhd has no effect on the direction of Omesti Bhd i.e., Omesti Bhd and Heineken Bhd go up and down completely randomly.
Pair Corralation between Omesti Bhd and Heineken Bhd
Assuming the 90 days trading horizon Omesti Bhd is expected to generate 7.08 times more return on investment than Heineken Bhd. However, Omesti Bhd is 7.08 times more volatile than Heineken Bhd. It trades about 0.05 of its potential returns per unit of risk. Heineken Bhd is currently generating about 0.08 per unit of risk. If you would invest 14.00 in Omesti Bhd on September 25, 2024 and sell it today you would earn a total of 1.00 from holding Omesti Bhd or generate 7.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Omesti Bhd vs. Heineken Bhd
Performance |
Timeline |
Omesti Bhd |
Heineken Bhd |
Omesti Bhd and Heineken Bhd Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Omesti Bhd and Heineken Bhd
The main advantage of trading using opposite Omesti Bhd and Heineken Bhd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omesti Bhd position performs unexpectedly, Heineken Bhd 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 Bhd will offset losses from the drop in Heineken Bhd's long position.Omesti Bhd vs. Malayan Banking Bhd | Omesti Bhd vs. Public Bank Bhd | Omesti Bhd vs. Petronas Chemicals Group | Omesti Bhd vs. Tenaga Nasional Bhd |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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