Correlation Between Kroger and Oriental Rise
Can any of the company-specific risk be diversified away by investing in both Kroger and Oriental Rise 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 Oriental Rise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Oriental Rise Holdings, you can compare the effects of market volatilities on Kroger and Oriental Rise 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 Oriental Rise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Oriental Rise.
Diversification Opportunities for Kroger and Oriental Rise
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kroger and Oriental is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Oriental Rise Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental Rise Holdings 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 Oriental Rise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Rise Holdings has no effect on the direction of Kroger i.e., Kroger and Oriental Rise go up and down completely randomly.
Pair Corralation between Kroger and Oriental Rise
Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.17 times more return on investment than Oriental Rise. However, Kroger Company is 5.8 times less risky than Oriental Rise. It trades about 0.32 of its potential returns per unit of risk. Oriental Rise Holdings is currently generating about -0.08 per unit of risk. If you would invest 5,626 in Kroger Company on September 2, 2024 and sell it today you would earn a total of 482.00 from holding Kroger Company or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Oriental Rise Holdings
Performance |
| Timeline |
| Kroger Company |
| Oriental Rise Holdings |
Kroger and Oriental Rise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Oriental Rise
The main advantage of trading using opposite Kroger and Oriental Rise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Oriental Rise 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 Oriental Rise will offset losses from the drop in Oriental Rise's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Sendas Distribuidora SA | Kroger vs. Weis Markets |
| Oriental Rise vs. Zoom Video Communications | Oriental Rise vs. Visteon Corp | Oriental Rise vs. Fidus Investment Corp | Oriental Rise vs. BorgWarner |
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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