Correlation Between Ecofin Global and Kroger
Can any of the company-specific risk be diversified away by investing in both Ecofin Global 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 Ecofin Global and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and Kroger Co, you can compare the effects of market volatilities on Ecofin Global 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 Ecofin Global with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and Kroger.
Diversification Opportunities for Ecofin Global and Kroger
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ecofin and Kroger is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities and Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger and Ecofin Global 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 Ecofin Global Utilities 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 has no effect on the direction of Ecofin Global i.e., Ecofin Global and Kroger go up and down completely randomly.
Pair Corralation between Ecofin Global and Kroger
Assuming the 90 days trading horizon Ecofin Global is expected to generate 2.4 times less return on investment than Kroger. But when comparing it to its historical volatility, Ecofin Global Utilities is 1.33 times less risky than Kroger. It trades about 0.06 of its potential returns per unit of risk. Kroger Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,124 in Kroger Co on September 1, 2024 and sell it today you would earn a total of 970.00 from holding Kroger Co or generate 18.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.47% |
| Values | Daily Returns |
Ecofin Global Utilities vs. Kroger Co
Performance |
| Timeline |
| Ecofin Global Utilities |
| Kroger |
Ecofin Global and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and Kroger
The main advantage of trading using opposite Ecofin Global and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global 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.| Ecofin Global vs. Toyota Motor Corp | Ecofin Global vs. SoftBank Group Corp | Ecofin Global vs. OTP Bank Nyrt | Ecofin Global vs. Las Vegas Sands |
| Kroger vs. Thor Mining PLC | Kroger vs. Fulcrum Metals PLC | Kroger vs. Power Metal Resources | Kroger vs. Ecclesiastical Insurance Office |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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