Correlation Between Awilco Drilling and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Awilco Drilling 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 Awilco Drilling and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Awilco Drilling PLC and Kraft Heinz Co, you can compare the effects of market volatilities on Awilco Drilling 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 Awilco Drilling with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Awilco Drilling and Kraft Heinz.
Diversification Opportunities for Awilco Drilling and Kraft Heinz
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Awilco and Kraft is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Awilco Drilling PLC and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Awilco Drilling 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 Awilco Drilling PLC 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 Awilco Drilling i.e., Awilco Drilling and Kraft Heinz go up and down completely randomly.
Pair Corralation between Awilco Drilling and Kraft Heinz
Assuming the 90 days horizon Awilco Drilling PLC is expected to generate 2.13 times more return on investment than Kraft Heinz. However, Awilco Drilling is 2.13 times more volatile than Kraft Heinz Co. It trades about 0.07 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 146.00 in Awilco Drilling PLC on September 1, 2024 and sell it today you would earn a total of 46.00 from holding Awilco Drilling PLC or generate 31.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Awilco Drilling PLC vs. Kraft Heinz Co
Performance |
| Timeline |
| Awilco Drilling PLC |
| Kraft Heinz |
Awilco Drilling and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Awilco Drilling and Kraft Heinz
The main advantage of trading using opposite Awilco Drilling and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Awilco Drilling 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.| Awilco Drilling vs. Seadrill Limited | Awilco Drilling vs. Nabors Industries | Awilco Drilling vs. Borr Drilling | Awilco Drilling vs. Patterson UTI Energy |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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