Correlation Between Kraft Heinz and National Beverage
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and National Beverage 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 National Beverage 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 National Beverage Corp, you can compare the effects of market volatilities on Kraft Heinz and National Beverage 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 National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and National Beverage.
Diversification Opportunities for Kraft Heinz and National Beverage
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kraft and National is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp 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 National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and National Beverage go up and down completely randomly.
Pair Corralation between Kraft Heinz and National Beverage
Considering the 90-day investment horizon Kraft Heinz Co is expected to under-perform the National Beverage. But the stock apears to be less risky and, when comparing its historical volatility, Kraft Heinz Co is 1.4 times less risky than National Beverage. The stock trades about -0.14 of its potential returns per unit of risk. The National Beverage Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,577 in National Beverage Corp on September 2, 2024 and sell it today you would earn a total of 362.00 from holding National Beverage Corp or generate 7.91% 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. National Beverage Corp
Performance |
| Timeline |
| Kraft Heinz |
| National Beverage Corp |
Kraft Heinz and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and National Beverage
The main advantage of trading using opposite Kraft Heinz and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
| National Beverage vs. Celsius Holdings | National Beverage vs. Monster Beverage Corp | National Beverage vs. Coca Cola Femsa SAB | National Beverage vs. Keurig Dr Pepper |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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