Correlation Between TINC Comm and HEINEKEN

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

By analyzing existing cross correlation between TINC Comm VA and HEINEKEN SP ADR, you can compare the effects of market volatilities on TINC Comm and HEINEKEN 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 TINC Comm with a short position of HEINEKEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of TINC Comm and HEINEKEN.

Diversification Opportunities for TINC Comm and HEINEKEN

-0.36

Correlation Coefficient

TINC Comm  HEINEKEN

Very good diversification

The 3 months correlation between TINC and HEINEKEN is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding TINC Comm VA and HEINEKEN SP ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEINEKEN SP ADR and TINC Comm 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 TINC Comm VA are associated (or correlated) with HEINEKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEINEKEN SP ADR has no effect on the direction of TINC Comm i.e., TINC Comm and HEINEKEN go up and down completely randomly.

Pair Corralation between TINC Comm and HEINEKEN

Assuming the 90 days horizon TINC Comm VA is expected to under-perform the HEINEKEN. But the stock apears to be less risky and, when comparing its historical volatility, TINC Comm VA is 1.32 times less risky than HEINEKEN. The stock trades about -0.05 of its potential returns per unit of risk. The HEINEKEN SP ADR is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,380  in HEINEKEN SP ADR on December 29, 2024 and sell it today you would earn a total of  280.00  from holding HEINEKEN SP ADR or generate 8.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

TINC Comm VA  vs.  HEINEKEN SP ADR

TINC Comm VA

Risk-Adjusted Performance

Very Weak

Over the last 90 days TINC Comm VA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, TINC Comm is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

HEINEKEN SP ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HEINEKEN SP ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, HEINEKEN may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with TINC Comm and HEINEKEN

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

The idea behind TINC Comm VA and HEINEKEN SP ADR 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.