Correlation Between Etn Fr and Kroger
Can any of the company-specific risk be diversified away by investing in both Etn Fr 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 Etn Fr and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etn Fr Colruyt and Kroger Company, you can compare the effects of market volatilities on Etn Fr 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 Etn Fr with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etn Fr and Kroger.
Diversification Opportunities for Etn Fr and Kroger
Very good diversification
The 3 months correlation between Etn and Kroger is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Etn Fr Colruyt and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company and Etn Fr 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 Etn Fr Colruyt 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 Etn Fr i.e., Etn Fr and Kroger go up and down completely randomly.
Pair Corralation between Etn Fr and Kroger
Assuming the 90 days horizon Etn Fr is expected to generate 36.11 times less return on investment than Kroger. But when comparing it to its historical volatility, Etn Fr Colruyt is 1.29 times less risky than Kroger. It trades about 0.01 of its potential returns per unit of risk. Kroger Company is currently generating about 0.15 of returns per unit of risk over similar time horizon. 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 | 31.25% |
| Values | Daily Returns |
Etn Fr Colruyt vs. Kroger Company
Performance |
| Timeline |
| Etn Fr Colruyt |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kroger Company |
Etn Fr and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etn Fr and Kroger
The main advantage of trading using opposite Etn Fr and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etn Fr 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.| Etn Fr vs. FT Vest Equity | Etn Fr vs. Zillow Group Class | Etn Fr vs. Northern Lights | Etn Fr vs. VanEck Vectors Moodys |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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