Correlation Between Kroger and Zanaga Iron
Can any of the company-specific risk be diversified away by investing in both Kroger and Zanaga Iron 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 Kroger and Zanaga Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Co and Zanaga Iron Ore, you can compare the effects of market volatilities on Kroger and Zanaga Iron 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 Kroger with a short position of Zanaga Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Zanaga Iron.
Diversification Opportunities for Kroger and Zanaga Iron
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kroger and Zanaga is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Co and Zanaga Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zanaga Iron Ore and Kroger 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 Kroger Co are associated (or correlated) with Zanaga Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zanaga Iron Ore has no effect on the direction of Kroger i.e., Kroger and Zanaga Iron go up and down completely randomly.
Pair Corralation between Kroger and Zanaga Iron
Assuming the 90 days trading horizon Kroger Co is expected to generate 0.29 times more return on investment than Zanaga Iron. However, Kroger Co is 3.48 times less risky than Zanaga Iron. It trades about 0.13 of its potential returns per unit of risk. Zanaga Iron Ore is currently generating about 0.02 per unit of risk. If you would invest 5,732 in Kroger Co on August 26, 2024 and sell it today you would earn a total of 197.00 from holding Kroger Co or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Co vs. Zanaga Iron Ore
Performance |
| Timeline |
| Kroger |
| Zanaga Iron Ore |
Kroger and Zanaga Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Zanaga Iron
The main advantage of trading using opposite Kroger and Zanaga Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Zanaga Iron 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 Zanaga Iron will offset losses from the drop in Zanaga Iron's long position.| Kroger vs. X FAB Silicon Foundries | Kroger vs. Sunny Optical Technology | Kroger vs. Universal Music Group | Kroger vs. Taiwan Semiconductor Manufacturing |
| Zanaga Iron vs. DFS Furniture PLC | Zanaga Iron vs. Premier Foods PLC | Zanaga Iron vs. Pets at Home | Zanaga Iron vs. Litigation Capital Management |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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