Correlation Between Kraft Heinz and Kerry Group
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Kerry Group 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 Kerry Group 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 Kerry Group PLC, you can compare the effects of market volatilities on Kraft Heinz and Kerry Group 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 Kerry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Kerry Group.
Diversification Opportunities for Kraft Heinz and Kerry Group
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kraft and Kerry is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Kerry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerry Group PLC 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 Kerry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerry Group PLC has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Kerry Group go up and down completely randomly.
Pair Corralation between Kraft Heinz and Kerry Group
Considering the 90-day investment horizon Kraft Heinz is expected to generate 1.71 times less return on investment than Kerry Group. But when comparing it to its historical volatility, Kraft Heinz Co is 1.12 times less risky than Kerry Group. It trades about 0.01 of its potential returns per unit of risk. Kerry Group PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 8,824 in Kerry Group PLC on August 30, 2024 and sell it today you would earn a total of 513.00 from holding Kerry Group PLC or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. Kerry Group PLC
Performance |
| Timeline |
| Kraft Heinz |
| Kerry Group PLC |
Kraft Heinz and Kerry Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and Kerry Group
The main advantage of trading using opposite Kraft Heinz and Kerry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Kerry Group 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 Kerry Group will offset losses from the drop in Kerry Group's long position.| Kraft Heinz vs. Seneca Foods Corp | Kraft Heinz vs. Central Garden Pet | Kraft Heinz vs. Central Garden Pet | Kraft Heinz vs. Lancaster Colony |
| Kerry Group vs. Associated British Foods | Kerry Group vs. Bunzl plc | Kerry Group vs. Ashtead Gro | Kerry Group vs. Coloplast A |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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