Correlation Between Kroger and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Kroger and Kraft Heinz 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 Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Kraft Heinz Co, you can compare the effects of market volatilities on Kroger and Kraft Heinz 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 Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Kraft Heinz.
Diversification Opportunities for Kroger and Kraft Heinz
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kroger and Kraft is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz 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 Kraft Heinz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Heinz has no effect on the direction of Kroger i.e., Kroger and Kraft Heinz go up and down completely randomly.
Pair Corralation between Kroger and Kraft Heinz
Allowing for the 90-day total investment horizon Kroger Company is expected to under-perform the Kraft Heinz. But the stock apears to be less risky and, when comparing its historical volatility, Kroger Company is 1.04 times less risky than Kraft Heinz. The stock trades about -0.2 of its potential returns per unit of risk. The Kraft Heinz Co is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 3,046 in Kraft Heinz Co on October 23, 2024 and sell it today you would lose (119.00) from holding Kraft Heinz Co or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Kraft Heinz Co
Performance |
| Timeline |
| Kroger Company |
| Kraft Heinz |
Kroger and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Kraft Heinz
The main advantage of trading using opposite Kroger and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Kraft Heinz 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 Kraft Heinz will offset losses from the drop in Kraft Heinz's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Weis Markets | Kroger vs. Ingles Markets Incorporated |
| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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