Correlation Between Kraft Heinz and Bon Natural
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Bon Natural 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 Bon Natural 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 Bon Natural Life, you can compare the effects of market volatilities on Kraft Heinz and Bon Natural 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 Bon Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Bon Natural.
Diversification Opportunities for Kraft Heinz and Bon Natural
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kraft and Bon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Bon Natural Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bon Natural Life 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 Bon Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bon Natural Life has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Bon Natural go up and down completely randomly.
Pair Corralation between Kraft Heinz and Bon Natural
Considering the 90-day investment horizon Kraft Heinz Co is expected to under-perform the Bon Natural. But the stock apears to be less risky and, when comparing its historical volatility, Kraft Heinz Co is 3.63 times less risky than Bon Natural. The stock trades about -0.35 of its potential returns per unit of risk. The Bon Natural Life is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 147.00 in Bon Natural Life on August 28, 2024 and sell it today you would earn a total of 22.00 from holding Bon Natural Life or generate 14.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. Bon Natural Life
Performance |
| Timeline |
| Kraft Heinz |
| Bon Natural Life |
Kraft Heinz and Bon Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and Bon Natural
The main advantage of trading using opposite Kraft Heinz and Bon Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Bon Natural 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 Bon Natural will offset losses from the drop in Bon Natural's long position.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
| Bon Natural vs. Blue Star Foods | Bon Natural vs. Grand Havana | Bon Natural vs. Real Good Food | Bon Natural vs. Central Garden Pet |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |