Correlation Between Kraft Heinz and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and AmTrust Financial 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 Kraft Heinz and AmTrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and AmTrust Financial Services, you can compare the effects of market volatilities on Kraft Heinz and AmTrust Financial 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 Kraft Heinz with a short position of AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and AmTrust Financial.
Diversification Opportunities for Kraft Heinz and AmTrust Financial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kraft and AmTrust is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and Kraft Heinz 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 Kraft Heinz Co are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and AmTrust Financial go up and down completely randomly.
Pair Corralation between Kraft Heinz and AmTrust Financial
Considering the 90-day investment horizon Kraft Heinz Co is expected to under-perform the AmTrust Financial. But the stock apears to be less risky and, when comparing its historical volatility, Kraft Heinz Co is 1.16 times less risky than AmTrust Financial. The stock trades about -0.13 of its potential returns per unit of risk. The AmTrust Financial Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,433 in AmTrust Financial Services on September 1, 2024 and sell it today you would earn a total of 27.00 from holding AmTrust Financial Services or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. AmTrust Financial Services
Performance |
| Timeline |
| Kraft Heinz |
| AmTrust Financial |
Kraft Heinz and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and AmTrust Financial
The main advantage of trading using opposite Kraft Heinz and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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