Correlation Between Hormel Foods and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Hormel Foods and Kraft Heinz 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 Hormel Foods and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and Kraft Heinz Co, you can compare the effects of market volatilities on Hormel Foods and Kraft Heinz 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 Hormel Foods with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and Kraft Heinz.
Diversification Opportunities for Hormel Foods and Kraft Heinz
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hormel and Kraft is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Hormel 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 Hormel Foods are associated (or correlated) with Kraft Heinz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Heinz has no effect on the direction of Hormel Foods i.e., Hormel Foods and Kraft Heinz go up and down completely randomly.
Pair Corralation between Hormel Foods and Kraft Heinz
Assuming the 90 days horizon Hormel Foods is expected to under-perform the Kraft Heinz. In addition to that, Hormel Foods is 1.17 times more volatile than Kraft Heinz Co. It trades about -0.03 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.01 per unit of volatility. If you would invest 2,821 in Kraft Heinz Co on January 10, 2025 and sell it today you would lose (271.00) from holding Kraft Heinz Co or give up 9.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. Kraft Heinz Co
Performance |
| Timeline |
| Hormel Foods |
| Kraft Heinz |
Hormel Foods and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and Kraft Heinz
The main advantage of trading using opposite Hormel Foods and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods position performs unexpectedly, Kraft Heinz 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 Kraft Heinz will offset losses from the drop in Kraft Heinz's long position.| Hormel Foods vs. COLUMBIA SPORTSWEAR | Hormel Foods vs. Tencent Music Entertainment | Hormel Foods vs. DISTRICT METALS | Hormel Foods vs. Gaming and Leisure |
| Kraft Heinz vs. bet at home AG | Kraft Heinz vs. CENTURIA OFFICE REIT | Kraft Heinz vs. Akamai Technologies | Kraft Heinz vs. INVITATION HOMES DL |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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