Correlation Between AALBERTS IND and Heineken

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

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

Diversification Opportunities for AALBERTS IND and Heineken

-0.21

Correlation Coefficient

AALBERTS IND  Heineken

Very good diversification

The 3 months correlation between AALBERTS and Heineken is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AALBERTS IND and Heineken NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken NV and AALBERTS IND 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 AALBERTS IND 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 NV has no effect on the direction of AALBERTS IND i.e., AALBERTS IND and Heineken go up and down completely randomly.

Pair Corralation between AALBERTS IND and Heineken

Assuming the 90 days trading horizon AALBERTS IND is expected to under-perform the Heineken. In addition to that, AALBERTS IND is 1.32 times more volatile than Heineken NV. It trades about -0.35 of its total potential returns per unit of risk. Heineken NV is currently generating about -0.03 per unit of volatility. If you would invest  6,914  in Heineken NV on October 7, 2024 and sell it today you would lose (54.00) from holding Heineken NV or give up 0.78% of portfolio value over 90 days.

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

AALBERTS IND  vs.  Heineken NV

AALBERTS IND

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AALBERTS IND has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, AALBERTS IND is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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. Despite fragile performance in the last few months, the Stock's forward-looking signals remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with AALBERTS IND and Heineken

The main advantage of trading using opposite AALBERTS IND and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AALBERTS IND 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 AALBERTS IND and Heineken 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.