Correlation Between Value8 NV and Heineken

Can any of the company-specific risk be diversified away by investing in both Value8 NV 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 Value8 NV and Heineken into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Value8 NV and Heineken, you can compare the effects of market volatilities on Value8 NV 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 Value8 NV with a short position of Heineken. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value8 NV and Heineken.

Diversification Opportunities for Value8 NV and Heineken

-0.41

Correlation Coefficient

Value8 NV  Heineken

Very good diversification

The 3 months correlation between Value8 and Heineken is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Value8 NV and Heineken in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heineken and Value8 NV 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 Value8 NV 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 Value8 NV i.e., Value8 NV and Heineken go up and down completely randomly.

Pair Corralation between Value8 NV and Heineken

Assuming the 90 days trading horizon Value8 NV is expected to generate 1.67 times more return on investment than Heineken. However, Value8 NV is 1.67 times more volatile than Heineken. It trades about 0.12 of its potential returns per unit of risk. Heineken is currently generating about 0.0 per unit of risk. If you would invest  561.00  in Value8 NV on April 22, 2025 and sell it today you would earn a total of  79.00  from holding Value8 NV or generate 14.08% return on investment over 90 days.

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

Value8 NV  vs.  Heineken

Value8 NV

Risk-Adjusted Performance

OK

Over the last 90 days Value8 NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Value8 NV sustained solid returns over the last few months and may actually be approaching a breakup point.

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Value8 NV and Heineken

The main advantage of trading using opposite Value8 NV and Heineken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value8 NV 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 Value8 NV 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.