Correlation Between Albertsons Companies and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Albertsons Companies 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 Albertsons Companies and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albertsons Companies and Kraft Heinz Co, you can compare the effects of market volatilities on Albertsons Companies 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 Albertsons Companies with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albertsons Companies and Kraft Heinz.
Diversification Opportunities for Albertsons Companies and Kraft Heinz
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albertsons and Kraft is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Albertsons Companies and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Albertsons Companies 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 Albertsons Companies 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 Albertsons Companies i.e., Albertsons Companies and Kraft Heinz go up and down completely randomly.
Pair Corralation between Albertsons Companies and Kraft Heinz
Considering the 90-day investment horizon Albertsons Companies is expected to generate 0.98 times more return on investment than Kraft Heinz. However, Albertsons Companies is 1.02 times less risky than Kraft Heinz. It trades about 0.27 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.14 per unit of risk. If you would invest 1,866 in Albertsons Companies on September 2, 2024 and sell it today you would earn a total of 119.00 from holding Albertsons Companies or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Albertsons Companies vs. Kraft Heinz Co
Performance |
| Timeline |
| Albertsons Companies |
| Kraft Heinz |
Albertsons Companies and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albertsons Companies and Kraft Heinz
The main advantage of trading using opposite Albertsons Companies and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albertsons Companies 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.The idea behind Albertsons Companies and Kraft Heinz Co 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.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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