Correlation Between Beyond Meat and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Beyond Meat 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 Beyond Meat and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Meat and Kraft Heinz Co, you can compare the effects of market volatilities on Beyond Meat 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 Beyond Meat with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Meat and Kraft Heinz.
Diversification Opportunities for Beyond Meat and Kraft Heinz
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Beyond and Kraft is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Meat and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Beyond Meat 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 Beyond Meat 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 Beyond Meat i.e., Beyond Meat and Kraft Heinz go up and down completely randomly.
Pair Corralation between Beyond Meat and Kraft Heinz
Given the investment horizon of 90 days Beyond Meat is expected to under-perform the Kraft Heinz. In addition to that, Beyond Meat is 3.62 times more volatile than Kraft Heinz Co. It trades about -0.04 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.02 per unit of volatility. If you would invest 3,352 in Kraft Heinz Co on September 1, 2024 and sell it today you would lose (155.00) from holding Kraft Heinz Co or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Meat vs. Kraft Heinz Co
Performance |
| Timeline |
| Beyond Meat |
| Kraft Heinz |
Beyond Meat and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Meat and Kraft Heinz
The main advantage of trading using opposite Beyond Meat and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Meat 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.| Beyond Meat vs. Kraft Heinz Co | Beyond Meat vs. Hormel Foods | Beyond Meat vs. Kellanova | Beyond Meat vs. General Mills |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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