Correlation Between Kroger and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Kroger and Kesko Oyj 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 Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Kesko Oyj ADR, you can compare the effects of market volatilities on Kroger and Kesko Oyj 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 Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Kesko Oyj.
Diversification Opportunities for Kroger and Kesko Oyj
Very good diversification
The 3 months correlation between Kroger and Kesko is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR 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 Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Kroger i.e., Kroger and Kesko Oyj go up and down completely randomly.
Pair Corralation between Kroger and Kesko Oyj
Allowing for the 90-day total investment horizon Kroger Company is expected to under-perform the Kesko Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Kroger Company is 1.29 times less risky than Kesko Oyj. The stock trades about -0.01 of its potential returns per unit of risk. The Kesko Oyj ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 931.00 in Kesko Oyj ADR on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Kesko Oyj ADR or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Kesko Oyj ADR
Performance |
| Timeline |
| Kroger Company |
| Kesko Oyj ADR |
Kroger and Kesko Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Kesko Oyj
The main advantage of trading using opposite Kroger and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Weis Markets | Kroger vs. Ingles Markets Incorporated |
| Kesko Oyj vs. Carrefour SA PK | Kesko Oyj vs. J Sainsbury plc | Kesko Oyj vs. Om Holdings International | Kesko Oyj vs. J Sainsbury PLC |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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