Correlation Between Jardine Matheson and Kroger
Can any of the company-specific risk be diversified away by investing in both Jardine Matheson 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 Jardine Matheson and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jardine Matheson Holdings and Kroger Co, you can compare the effects of market volatilities on Jardine Matheson 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 Jardine Matheson with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jardine Matheson and Kroger.
Diversification Opportunities for Jardine Matheson and Kroger
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jardine and Kroger is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jardine Matheson Holdings and Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger and Jardine Matheson 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 Jardine Matheson Holdings 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 Jardine Matheson i.e., Jardine Matheson and Kroger go up and down completely randomly.
Pair Corralation between Jardine Matheson and Kroger
Assuming the 90 days trading horizon Jardine Matheson is expected to generate 4.6 times less return on investment than Kroger. But when comparing it to its historical volatility, Jardine Matheson Holdings is 3.91 times less risky than Kroger. It trades about 0.04 of its potential returns per unit of risk. Kroger Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,410 in Kroger Co on August 26, 2024 and sell it today you would earn a total of 1,519 from holding Kroger Co or generate 34.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Jardine Matheson Holdings vs. Kroger Co
Performance |
| Timeline |
| Jardine Matheson Holdings |
| Kroger |
Jardine Matheson and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jardine Matheson and Kroger
The main advantage of trading using opposite Jardine Matheson and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jardine Matheson 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.| Jardine Matheson vs. Samsung Electronics Co | Jardine Matheson vs. Samsung Electronics Co | Jardine Matheson vs. Hyundai Motor | Jardine Matheson vs. Toyota Motor Corp |
| Kroger vs. Samsung Electronics Co | Kroger vs. Samsung Electronics Co | Kroger vs. Hyundai Motor | Kroger vs. Toyota Motor Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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