Correlation Between Heineken Holding and Comba Telecom
Can any of the company-specific risk be diversified away by investing in both Heineken Holding and Comba Telecom 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 Holding and Comba Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heineken Holding NV and Comba Telecom Systems, you can compare the effects of market volatilities on Heineken Holding and Comba Telecom 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 Holding with a short position of Comba Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Holding and Comba Telecom.
Diversification Opportunities for Heineken Holding and Comba Telecom
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Heineken and Comba is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Holding NV and Comba Telecom Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comba Telecom Systems and Heineken Holding 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 Holding NV are associated (or correlated) with Comba Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comba Telecom Systems has no effect on the direction of Heineken Holding i.e., Heineken Holding and Comba Telecom go up and down completely randomly.
Pair Corralation between Heineken Holding and Comba Telecom
Assuming the 90 days horizon Heineken Holding is expected to generate 3.32 times less return on investment than Comba Telecom. But when comparing it to its historical volatility, Heineken Holding NV is 2.21 times less risky than Comba Telecom. It trades about 0.11 of its potential returns per unit of risk. Comba Telecom Systems is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Comba Telecom Systems on December 30, 2024 and sell it today you would earn a total of 7.00 from holding Comba Telecom Systems or generate 50.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Heineken Holding NV vs. Comba Telecom Systems
Performance |
Timeline |
Heineken Holding |
Comba Telecom Systems |
Heineken Holding and Comba Telecom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Heineken Holding and Comba Telecom
The main advantage of trading using opposite Heineken Holding and Comba Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heineken Holding position performs unexpectedly, Comba Telecom 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 Comba Telecom will offset losses from the drop in Comba Telecom's long position.Heineken Holding vs. Cardinal Health | Heineken Holding vs. National Health Investors | Heineken Holding vs. NISSAN CHEMICAL IND | Heineken Holding vs. Sekisui Chemical Co |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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