Correlation Between Carrefour and Kroger
Can any of the company-specific risk be diversified away by investing in both Carrefour 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 Carrefour and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carrefour SA PK and Kroger Company, you can compare the effects of market volatilities on Carrefour 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 Carrefour with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carrefour and Kroger.
Diversification Opportunities for Carrefour and Kroger
Very good diversification
The 3 months correlation between Carrefour and Kroger is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Carrefour SA PK and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company and Carrefour 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 Carrefour SA PK 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 Carrefour i.e., Carrefour and Kroger go up and down completely randomly.
Pair Corralation between Carrefour and Kroger
Assuming the 90 days horizon Carrefour SA PK is expected to under-perform the Kroger. In addition to that, Carrefour is 1.19 times more volatile than Kroger Company. It trades about -0.05 of its total potential returns per unit of risk. Kroger Company is currently generating about 0.15 per unit of volatility. If you would invest 5,341 in Kroger Company on September 3, 2024 and sell it today you would earn a total of 767.00 from holding Kroger Company or generate 14.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carrefour SA PK vs. Kroger Company
Performance |
| Timeline |
| Carrefour SA PK |
| Kroger Company |
Carrefour and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carrefour and Kroger
The main advantage of trading using opposite Carrefour and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carrefour 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.| Carrefour vs. Kesko Oyj ADR | Carrefour vs. Om Holdings International | Carrefour vs. Tesco PLC | Carrefour vs. Carrefour SA |
| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Sendas Distribuidora SA | Kroger vs. Weis Markets |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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