Correlation Between Koninklijke Ahold and Heineken

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

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

Diversification Opportunities for Koninklijke Ahold and Heineken

0.5

Correlation Coefficient

Koninklijke Ahold  Heineken

Very weak diversification

The 3 months correlation between Koninklijke and Heineken is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Heineken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken and Koninklijke Ahold 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 Koninklijke Ahold Delhaize 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 has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Heineken go up and down completely randomly.

Pair Corralation between Koninklijke Ahold and Heineken

Assuming the 90 days horizon Koninklijke Ahold Delhaize is expected to under-perform the Heineken. But the stock apears to be less risky and, when comparing its historical volatility, Koninklijke Ahold Delhaize is 1.21 times less risky than Heineken. The stock trades about -0.01 of its potential returns per unit of risk. The Heineken is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  7,767  in Heineken on April 20, 2025 and sell it today you would lose (43.00) from holding Heineken or give up 0.55% of portfolio value over 90 days.

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

Koninklijke Ahold Delhaize  vs.  Heineken

Koninklijke Ahold

Risk-Adjusted Performance

Very Weak

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

Heineken

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Koninklijke Ahold and Heineken

The main advantage of trading using opposite Koninklijke Ahold and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold 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 Koninklijke Ahold Delhaize and Heineken 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.