Correlation Between AGRICUL BK and Kroger
Can any of the company-specific risk be diversified away by investing in both AGRICUL BK 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 AGRICUL BK and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AGRICUL BK CHINA H and The Kroger Co, you can compare the effects of market volatilities on AGRICUL BK 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 AGRICUL BK with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICUL BK and Kroger.
Diversification Opportunities for AGRICUL BK and Kroger
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AGRICUL and Kroger is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding AGRICUL BK CHINA H and The Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Kroger and AGRICUL BK 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 AGRICUL BK CHINA H 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 The Kroger has no effect on the direction of AGRICUL BK i.e., AGRICUL BK and Kroger go up and down completely randomly.
Pair Corralation between AGRICUL BK and Kroger
Assuming the 90 days trading horizon AGRICUL BK is expected to generate 8.27 times less return on investment than Kroger. But when comparing it to its historical volatility, AGRICUL BK CHINA H is 1.19 times less risky than Kroger. It trades about 0.01 of its potential returns per unit of risk. The Kroger Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,310 in The Kroger Co on August 26, 2024 and sell it today you would earn a total of 161.00 from holding The Kroger Co or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AGRICUL BK CHINA H vs. The Kroger Co
Performance |
| Timeline |
| AGRICUL BK CHINA |
| The Kroger |
AGRICUL BK and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AGRICUL BK and Kroger
The main advantage of trading using opposite AGRICUL BK and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGRICUL BK 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.| AGRICUL BK vs. Strategic Investments AS | AGRICUL BK vs. Apollo Investment Corp | AGRICUL BK vs. REGAL ASIAN INVESTMENTS | AGRICUL BK vs. HK Electric Investments |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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