Correlation Between Nordon Indstrias and Kroger
Can any of the company-specific risk be diversified away by investing in both Nordon Indstrias and Kroger 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 Nordon Indstrias and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nordon Indstrias Metalrgicas and The Kroger Co, you can compare the effects of market volatilities on Nordon Indstrias and Kroger 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 Nordon Indstrias with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nordon Indstrias and Kroger.
Diversification Opportunities for Nordon Indstrias and Kroger
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nordon and Kroger is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nordon Indstrias Metalrgicas and The Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Kroger and Nordon Indstrias 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 Nordon Indstrias Metalrgicas are associated (or correlated) with Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Kroger has no effect on the direction of Nordon Indstrias i.e., Nordon Indstrias and Kroger go up and down completely randomly.
Pair Corralation between Nordon Indstrias and Kroger
Assuming the 90 days trading horizon Nordon Indstrias Metalrgicas is expected to under-perform the Kroger. In addition to that, Nordon Indstrias is 1.3 times more volatile than The Kroger Co. It trades about -0.22 of its total potential returns per unit of risk. The Kroger Co is currently generating about 0.01 per unit of volatility. If you would invest 37,126 in The Kroger Co on November 7, 2024 and sell it today you would earn a total of 42.00 from holding The Kroger Co or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Nordon Indstrias Metalrgicas vs. The Kroger Co
Performance |
| Timeline |
| Nordon Indstrias Met |
| The Kroger |
Nordon Indstrias and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nordon Indstrias and Kroger
The main advantage of trading using opposite Nordon Indstrias and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nordon Indstrias position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| Nordon Indstrias vs. Walmart | Nordon Indstrias vs. Amazon Inc | Nordon Indstrias vs. Accenture plc | Nordon Indstrias vs. The Kroger Co |
| Kroger vs. BIONTECH SE DRN | Kroger vs. Melco Resorts Entertainment | Kroger vs. Fresenius Medical Care | Kroger vs. Raytheon Technologies |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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