Correlation Between Strategic Education and Heineken Holding

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

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

Diversification Opportunities for Strategic Education and Heineken Holding

-0.89

Correlation Coefficient

Strategic Education  Heineken Holding

Pay attention - limited upside

The 3 months correlation between Strategic and Heineken is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Heineken Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken Holding and Strategic Education 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 Strategic Education 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 Strategic Education i.e., Strategic Education and Heineken Holding go up and down completely randomly.

Pair Corralation between Strategic Education and Heineken Holding

Assuming the 90 days horizon Strategic Education is expected to under-perform the Heineken Holding. In addition to that, Strategic Education is 1.68 times more volatile than Heineken Holding NV. It trades about -0.15 of its total potential returns per unit of risk. Heineken Holding NV is currently generating about -0.2 per unit of volatility. If you would invest  5,945  in Heineken Holding NV on September 28, 2024 and sell it today you would lose (215.00) from holding Heineken Holding NV or give up 3.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Strategic Education  vs.  Heineken Holding NV

Strategic Education

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Education are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Strategic Education may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Heineken Holding

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Strategic Education and Heineken Holding

The main advantage of trading using opposite Strategic Education and Heineken Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education 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 Strategic Education 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.