Correlation Between Kroger and Carrefour
Can any of the company-specific risk be diversified away by investing in both Kroger and Carrefour 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 Carrefour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Carrefour SA PK, you can compare the effects of market volatilities on Kroger and Carrefour 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 Carrefour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Carrefour.
Diversification Opportunities for Kroger and Carrefour
Excellent diversification
The 3 months correlation between Kroger and Carrefour is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Carrefour SA PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carrefour SA PK 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 Carrefour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carrefour SA PK has no effect on the direction of Kroger i.e., Kroger and Carrefour go up and down completely randomly.
Pair Corralation between Kroger and Carrefour
Allowing for the 90-day total investment horizon Kroger Company is expected to under-perform the Carrefour. But the stock apears to be less risky and, when comparing its historical volatility, Kroger Company is 1.54 times less risky than Carrefour. The stock trades about -0.01 of its potential returns per unit of risk. The Carrefour SA PK is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 274.00 in Carrefour SA PK on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Carrefour SA PK or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Carrefour SA PK
Performance |
| Timeline |
| Kroger Company |
| Carrefour SA PK |
Kroger and Carrefour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Carrefour
The main advantage of trading using opposite Kroger and Carrefour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Carrefour 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 Carrefour will offset losses from the drop in Carrefour's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Weis Markets | Kroger vs. Ingles Markets Incorporated |
| Carrefour vs. Kesko Oyj ADR | Carrefour vs. Carrefour SA | Carrefour vs. J Sainsbury plc | Carrefour vs. Om Holdings International |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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