Correlation Between Aedas Homes and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Aedas Homes and Kraft Heinz 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 Aedas Homes and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aedas Homes SA and Kraft Heinz Co, you can compare the effects of market volatilities on Aedas Homes and Kraft Heinz 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 Aedas Homes with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aedas Homes and Kraft Heinz.
Diversification Opportunities for Aedas Homes and Kraft Heinz
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Aedas and Kraft is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Aedas Homes SA and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Aedas Homes 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 Aedas Homes SA are associated (or correlated) with Kraft Heinz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Heinz has no effect on the direction of Aedas Homes i.e., Aedas Homes and Kraft Heinz go up and down completely randomly.
Pair Corralation between Aedas Homes and Kraft Heinz
Assuming the 90 days horizon Aedas Homes SA is expected to generate 1.39 times more return on investment than Kraft Heinz. However, Aedas Homes is 1.39 times more volatile than Kraft Heinz Co. It trades about 0.11 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.02 per unit of risk. If you would invest 974.00 in Aedas Homes SA on September 16, 2024 and sell it today you would earn a total of 1,506 from holding Aedas Homes SA or generate 154.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aedas Homes SA vs. Kraft Heinz Co
Performance |
| Timeline |
| Aedas Homes SA |
| Kraft Heinz |
Aedas Homes and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aedas Homes and Kraft Heinz
The main advantage of trading using opposite Aedas Homes and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aedas Homes position performs unexpectedly, Kraft Heinz 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 Kraft Heinz will offset losses from the drop in Kraft Heinz's long position.| Aedas Homes vs. Lennar | Aedas Homes vs. Sekisui Chemical Co | Aedas Homes vs. Superior Plus Corp | Aedas Homes vs. SIVERS SEMICONDUCTORS AB |
| Kraft Heinz vs. Superior Plus Corp | Kraft Heinz vs. SIVERS SEMICONDUCTORS AB | Kraft Heinz vs. NorAm Drilling AS | Kraft Heinz vs. Norsk Hydro ASA |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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