Correlation Between Kroger and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Kroger and Koninklijke Ahold 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 Koninklijke Ahold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Kroger and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Koninklijke Ahold.
Diversification Opportunities for Kroger and Koninklijke Ahold
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kroger and Koninklijke is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Kroger Company are associated (or correlated) with Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Kroger i.e., Kroger and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Kroger and Koninklijke Ahold
If you would invest 5,680 in Kroger Company on August 28, 2024 and sell it today you would earn a total of 329.00 from holding Kroger Company or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Kroger Company vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Kroger Company |
| Koninklijke Ahold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kroger and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Koninklijke Ahold
The main advantage of trading using opposite Kroger and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Kroger vs. Innovative Food Hldg | Kroger vs. Calavo Growers | Kroger vs. The Chefs Warehouse | Kroger vs. AMCON Distributing |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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