Correlation Between Kroger and Suntory Beverage
Can any of the company-specific risk be diversified away by investing in both Kroger and Suntory 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 Kroger and Suntory Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Kroger Co and Suntory Beverage Food, you can compare the effects of market volatilities on Kroger and Suntory 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 Kroger with a short position of Suntory Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Suntory Beverage.
Diversification Opportunities for Kroger and Suntory Beverage
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kroger and Suntory is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Kroger Co and Suntory Beverage Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suntory Beverage Food and Kroger 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 The Kroger Co are associated (or correlated) with Suntory Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suntory Beverage Food has no effect on the direction of Kroger i.e., Kroger and Suntory Beverage go up and down completely randomly.
Pair Corralation between Kroger and Suntory Beverage
Assuming the 90 days horizon The Kroger Co is expected to generate 0.89 times more return on investment than Suntory Beverage. However, The Kroger Co is 1.13 times less risky than Suntory Beverage. It trades about 0.1 of its potential returns per unit of risk. Suntory Beverage Food is currently generating about -0.08 per unit of risk. If you would invest 4,928 in The Kroger Co on September 12, 2024 and sell it today you would earn a total of 508.00 from holding The Kroger Co or generate 10.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Kroger Co vs. Suntory Beverage Food
Performance |
| Timeline |
| The Kroger |
| Suntory Beverage Food |
Kroger and Suntory Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Suntory Beverage
The main advantage of trading using opposite Kroger and Suntory Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Suntory 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 Suntory Beverage will offset losses from the drop in Suntory Beverage's long position.| Kroger vs. DICKS Sporting Goods | Kroger vs. Fukuyama Transporting Co | Kroger vs. SPORTING | Kroger vs. Ming Le Sports |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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