Correlation Between Kroger and Sanlam
Can any of the company-specific risk be diversified away by investing in both Kroger and Sanlam 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 Sanlam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Sanlam Ltd PK, you can compare the effects of market volatilities on Kroger and Sanlam 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 Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Sanlam.
Diversification Opportunities for Kroger and Sanlam
Good diversification
The 3 months correlation between Kroger and Sanlam is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Sanlam Ltd PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Ltd PK 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 Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Ltd PK has no effect on the direction of Kroger i.e., Kroger and Sanlam go up and down completely randomly.
Pair Corralation between Kroger and Sanlam
Allowing for the 90-day total investment horizon Kroger Company is expected to under-perform the Sanlam. But the stock apears to be less risky and, when comparing its historical volatility, Kroger Company is 2.0 times less risky than Sanlam. The stock trades about -0.2 of its potential returns per unit of risk. The Sanlam Ltd PK is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 947.00 in Sanlam Ltd PK on October 22, 2024 and sell it today you would lose (25.00) from holding Sanlam Ltd PK or give up 2.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Sanlam Ltd PK
Performance |
| Timeline |
| Kroger Company |
| Sanlam Ltd PK |
Kroger and Sanlam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Sanlam
The main advantage of trading using opposite Kroger and Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Sanlam 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 Sanlam will offset losses from the drop in Sanlam's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Weis Markets | Kroger vs. Ingles Markets Incorporated |
| Sanlam vs. Ping An Insurance | Sanlam vs. CNO Financial Group | Sanlam vs. Genworth Financial | Sanlam vs. MetLife Preferred Stock |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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