Correlation Between Heineken Holding and Iex Group

Can any of the company-specific risk be diversified away by investing in both Heineken Holding and Iex Group 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 Iex Group 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 Iex Group NV, you can compare the effects of market volatilities on Heineken Holding and Iex Group 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 Iex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heineken Holding and Iex Group.

Diversification Opportunities for Heineken Holding and Iex Group

-0.19

Correlation Coefficient

Heineken Holding  Iex Group

Good diversification

The 3 months correlation between Heineken and Iex is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Heineken Holding NV and Iex Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iex Group NV 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 Iex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iex Group NV has no effect on the direction of Heineken Holding i.e., Heineken Holding and Iex Group go up and down completely randomly.

Pair Corralation between Heineken Holding and Iex Group

Assuming the 90 days trading horizon Heineken Holding NV is expected to under-perform the Iex Group. But the stock apears to be less risky and, when comparing its historical volatility, Heineken Holding NV is 1.88 times less risky than Iex Group. The stock trades about -0.01 of its potential returns per unit of risk. The Iex Group NV is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  188.00  in Iex Group NV on April 20, 2025 and sell it today you would earn a total of  22.00  from holding Iex Group NV or generate 11.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.94%
Values	Daily Returns

Heineken Holding NV  vs.  Iex Group NV

Heineken Holding

Risk-Adjusted Performance

Very Weak

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

Iex Group NV

Risk-Adjusted Performance

OK

Over the last 90 days Iex Group NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively weak basic indicators, Iex Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heineken Holding and Iex Group

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

The idea behind Heineken Holding NV and Iex Group 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.