Correlation Between Heineken Bhd and Dufu Tech

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

By analyzing existing cross correlation between Heineken Bhd and Dufu Tech Corp, you can compare the effects of market volatilities on Heineken Bhd and Dufu Tech 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 Dufu Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Bhd and Dufu Tech.

Diversification Opportunities for Heineken Bhd and Dufu Tech

-0.61

Correlation Coefficient

Heineken Bhd  Dufu Tech

Excellent diversification

The 3 months correlation between Heineken and Dufu is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Bhd and Dufu Tech Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dufu Tech Corp 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 Dufu Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dufu Tech Corp has no effect on the direction of Heineken Bhd i.e., Heineken Bhd and Dufu Tech go up and down completely randomly.

Pair Corralation between Heineken Bhd and Dufu Tech

Assuming the 90 days trading horizon Heineken Bhd is expected to generate 0.56 times more return on investment than Dufu Tech. However, Heineken Bhd is 1.8 times less risky than Dufu Tech. It trades about 0.15 of its potential returns per unit of risk. Dufu Tech Corp is currently generating about -0.34 per unit of risk. If you would invest  2,362  in Heineken Bhd on December 25, 2024 and sell it today you would earn a total of  298.00  from holding Heineken Bhd or generate 12.62% return on investment over 90 days.

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

Heineken Bhd  vs.  Dufu Tech Corp

Heineken Bhd

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heineken Bhd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Heineken Bhd disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dufu Tech Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dufu Tech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Heineken Bhd and Dufu Tech

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

The idea behind Heineken Bhd and Dufu Tech Corp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.