Correlation Between Calavo Growers and Kroger
Can any of the company-specific risk be diversified away by investing in both Calavo Growers 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 Calavo Growers and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calavo Growers and Kroger Company, you can compare the effects of market volatilities on Calavo Growers 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 Calavo Growers with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calavo Growers and Kroger.
Diversification Opportunities for Calavo Growers and Kroger
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calavo and Kroger is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calavo Growers and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company and Calavo Growers 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 Calavo Growers 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 Calavo Growers i.e., Calavo Growers and Kroger go up and down completely randomly.
Pair Corralation between Calavo Growers and Kroger
Given the investment horizon of 90 days Calavo Growers is expected to generate 6.85 times less return on investment than Kroger. In addition to that, Calavo Growers is 2.28 times more volatile than Kroger Company. It trades about 0.0 of its total potential returns per unit of risk. Kroger Company is currently generating about 0.05 per unit of volatility. If you would invest 4,434 in Kroger Company on August 30, 2024 and sell it today you would earn a total of 1,616 from holding Kroger Company or generate 36.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calavo Growers vs. Kroger Company
Performance |
| Timeline |
| Calavo Growers |
| Kroger Company |
Calavo Growers and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calavo Growers and Kroger
The main advantage of trading using opposite Calavo Growers and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calavo Growers 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.| Calavo Growers vs. SpartanNash Co | Calavo Growers vs. The Andersons | Calavo Growers vs. The Chefs Warehouse | Calavo Growers vs. Hf Foods Group |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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