Correlation Between Kroger and Ocado Group
Can any of the company-specific risk be diversified away by investing in both Kroger and Ocado Group 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 Ocado Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Ocado Group PLC, you can compare the effects of market volatilities on Kroger and Ocado Group 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 Ocado Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Ocado Group.
Diversification Opportunities for Kroger and Ocado Group
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kroger and Ocado is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Ocado Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ocado Group PLC 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 Ocado Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ocado Group PLC has no effect on the direction of Kroger i.e., Kroger and Ocado Group go up and down completely randomly.
Pair Corralation between Kroger and Ocado Group
Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.5 times more return on investment than Ocado Group. However, Kroger Company is 2.01 times less risky than Ocado Group. It trades about 0.15 of its potential returns per unit of risk. Ocado Group PLC is currently generating about -0.07 per unit of risk. If you would invest 5,341 in Kroger Company on September 3, 2024 and sell it today you would earn a total of 767.00 from holding Kroger Company or generate 14.36% 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. Ocado Group PLC
Performance |
| Timeline |
| Kroger Company |
| Ocado Group PLC |
Kroger and Ocado Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Ocado Group
The main advantage of trading using opposite Kroger and Ocado Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Ocado Group 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 Ocado Group will offset losses from the drop in Ocado Group's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Sendas Distribuidora SA | Kroger vs. Weis Markets |
| Ocado Group vs. Tesco PLC | Ocado Group vs. Dairy Farm International | Ocado Group vs. Woolworths Group Limited | Ocado Group vs. Kesko Oyj ADR |
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 Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stocks Directory Find actively traded stocks across global markets |