Correlation Between Heineken and Anadolu Efes

Can any of the company-specific risk be diversified away by investing in both Heineken and Anadolu Efes 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 and Anadolu Efes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Heineken NV and Anadolu Efes Biracilik, you can compare the effects of market volatilities on Heineken and Anadolu Efes 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 with a short position of Anadolu Efes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken and Anadolu Efes.

Diversification Opportunities for Heineken and Anadolu Efes

-0.67

Correlation Coefficient

Heineken  Anadolu Efes

Excellent diversification

The 3 months correlation between Heineken and Anadolu is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Heineken NV and Anadolu Efes Biracilik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadolu Efes Biracilik and Heineken 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 NV are associated (or correlated) with Anadolu Efes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadolu Efes Biracilik has no effect on the direction of Heineken i.e., Heineken and Anadolu Efes go up and down completely randomly.

Pair Corralation between Heineken and Anadolu Efes

Assuming the 90 days horizon Heineken NV is expected to under-perform the Anadolu Efes. But the otc stock apears to be less risky and, when comparing its historical volatility, Heineken NV is 3.19 times less risky than Anadolu Efes. The otc stock trades about -0.03 of its potential returns per unit of risk. The Anadolu Efes Biracilik is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  67.00  in Anadolu Efes Biracilik on September 26, 2024 and sell it today you would earn a total of  69.00  from holding Anadolu Efes Biracilik or generate 102.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.12%
Values	Daily Returns

Heineken NV  vs.  Anadolu Efes Biracilik

Heineken NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heineken NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Anadolu Efes Biracilik

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anadolu Efes Biracilik are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Anadolu Efes showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heineken and Anadolu Efes

The main advantage of trading using opposite Heineken and Anadolu Efes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken position performs unexpectedly, Anadolu Efes 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 Anadolu Efes will offset losses from the drop in Anadolu Efes' long position.

The idea behind Heineken NV and Anadolu Efes Biracilik 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.