Correlation Between Hf Foods and Kroger
Can any of the company-specific risk be diversified away by investing in both Hf Foods 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 Hf Foods and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hf Foods Group and Kroger Company, you can compare the effects of market volatilities on Hf Foods 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 Hf Foods with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and Kroger.
Diversification Opportunities for Hf Foods and Kroger
Very weak diversification
The 3 months correlation between HFFG and Kroger is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods Group and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company and Hf Foods 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 Hf Foods Group 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 Hf Foods i.e., Hf Foods and Kroger go up and down completely randomly.
Pair Corralation between Hf Foods and Kroger
Given the investment horizon of 90 days Hf Foods is expected to generate 1.39 times less return on investment than Kroger. In addition to that, Hf Foods is 2.97 times more volatile than Kroger Company. It trades about 0.01 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 |
Hf Foods Group vs. Kroger Company
Performance |
| Timeline |
| Hf Foods Group |
| Kroger Company |
Hf Foods and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and Kroger
The main advantage of trading using opposite Hf Foods and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods 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.| Hf Foods vs. G Willi Food International | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse | Hf Foods vs. Performance Food 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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