Correlation Between Kroger and High Tide
Can any of the company-specific risk be diversified away by investing in both Kroger and High Tide 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 High Tide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and High Tide, you can compare the effects of market volatilities on Kroger and High Tide 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 High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and High Tide.
Diversification Opportunities for Kroger and High Tide
Poor diversification
The 3 months correlation between Kroger and High is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide 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 High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of Kroger i.e., Kroger and High Tide go up and down completely randomly.
Pair Corralation between Kroger and High Tide
Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.42 times more return on investment than High Tide. However, Kroger Company is 2.36 times less risky than High Tide. It trades about 0.11 of its potential returns per unit of risk. High Tide is currently generating about -0.04 per unit of risk. If you would invest 5,731 in Kroger Company on August 24, 2024 and sell it today you would earn a total of 189.50 from holding Kroger Company or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. High Tide
Performance |
| Timeline |
| Kroger Company |
| High Tide |
Kroger and High Tide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and High Tide
The main advantage of trading using opposite Kroger and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, High Tide 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 High Tide will offset losses from the drop in High Tide's long position.| Kroger vs. Natural Grocers by | Kroger vs. Village Super Market | Kroger vs. Ingles Markets Incorporated | Kroger vs. Ocado Group plc |
| High Tide vs. Walgreens Boots Alliance | High Tide vs. PetMed Express | High Tide vs. China Jo Jo Drugstores | High Tide vs. Leafly Holdings |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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