Correlation Between Kroger and Xiaomi Corp
Can any of the company-specific risk be diversified away by investing in both Kroger and Xiaomi Corp 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 Xiaomi Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Xiaomi Corp ADR, you can compare the effects of market volatilities on Kroger and Xiaomi Corp 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 Xiaomi Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Xiaomi Corp.
Diversification Opportunities for Kroger and Xiaomi Corp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kroger and Xiaomi is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Xiaomi Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi Corp 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 Xiaomi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi Corp ADR has no effect on the direction of Kroger i.e., Kroger and Xiaomi Corp go up and down completely randomly.
Pair Corralation between Kroger and Xiaomi Corp
Allowing for the 90-day total investment horizon Kroger is expected to generate 5.11 times less return on investment than Xiaomi Corp. But when comparing it to its historical volatility, Kroger Company is 2.11 times less risky than Xiaomi Corp. It trades about 0.1 of its potential returns per unit of risk. Xiaomi Corp ADR is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,744 in Xiaomi Corp ADR on November 1, 2024 and sell it today you would earn a total of 909.00 from holding Xiaomi Corp ADR or generate 52.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Xiaomi Corp ADR
Performance |
| Timeline |
| Kroger Company |
| Xiaomi Corp ADR |
Kroger and Xiaomi Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Xiaomi Corp
The main advantage of trading using opposite Kroger and Xiaomi Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Xiaomi Corp 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 Xiaomi Corp will offset losses from the drop in Xiaomi Corp's long position.| Kroger vs. Grocery Outlet Holding | Kroger vs. Sprouts Farmers Market | Kroger vs. Weis Markets | Kroger vs. Ingles Markets Incorporated |
| Xiaomi Corp vs. Samsung Electronics Co | Xiaomi Corp vs. Sharp Corp ADR | Xiaomi Corp vs. LG Display Co | Xiaomi Corp vs. Universal Electronics |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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