Correlation Between Koninklijke Ahold and Kroger
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and Kroger 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 Koninklijke Ahold and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and Kroger Company, you can compare the effects of market volatilities on Koninklijke Ahold and Kroger 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 Koninklijke Ahold with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and Kroger.
Diversification Opportunities for Koninklijke Ahold and Kroger
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Koninklijke and Kroger is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kroger Company has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and Kroger go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and Kroger
Assuming the 90 days horizon Koninklijke Ahold is expected to generate 1.87 times less return on investment than Kroger. In addition to that, Koninklijke Ahold is 1.05 times more volatile than Kroger Company. It trades about 0.1 of its total potential returns per unit of risk. Kroger Company is currently generating about 0.2 per unit of volatility. If you would invest 5,680 in Kroger Company on August 27, 2024 and sell it today you would earn a total of 329.00 from holding Kroger Company or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. Kroger Company
Performance |
| Timeline |
| Koninklijke Ahold |
| Kroger Company |
Koninklijke Ahold and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and Kroger
The main advantage of trading using opposite Koninklijke Ahold and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| Koninklijke Ahold vs. Natural Grocers by | Koninklijke Ahold vs. Grocery Outlet Holding | Koninklijke Ahold vs. Village Super Market | Koninklijke Ahold vs. Ingles Markets Incorporated |
| Kroger vs. Innovative Food Hldg | Kroger vs. Calavo Growers | Kroger vs. The Chefs Warehouse | Kroger vs. AMCON Distributing |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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