Correlation Between John B and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both John B 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 John B and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and Kraft Heinz Co, you can compare the effects of market volatilities on John B 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 John B with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Kraft Heinz.
Diversification Opportunities for John B and Kraft Heinz
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between John and Kraft is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and John B 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 John B Sanfilippo 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 John B i.e., John B and Kraft Heinz go up and down completely randomly.
Pair Corralation between John B and Kraft Heinz
Given the investment horizon of 90 days John B Sanfilippo is expected to under-perform the Kraft Heinz. In addition to that, John B is 1.5 times more volatile than Kraft Heinz Co. It trades about -0.08 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.06 per unit of volatility. If you would invest 3,456 in Kraft Heinz Co on November 3, 2024 and sell it today you would lose (472.00) from holding Kraft Heinz Co or give up 13.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
John B Sanfilippo vs. Kraft Heinz Co
Performance |
| Timeline |
| John B Sanfilippo |
| Kraft Heinz |
John B and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John B and Kraft Heinz
The main advantage of trading using opposite John B and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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.| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B vs. J J Snack |
| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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