Correlation Between NYSE Composite and KRAFT
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By analyzing existing cross correlation between NYSE Composite and KRAFT HEINZ FOODS, you can compare the effects of market volatilities on NYSE Composite and KRAFT 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 NYSE Composite with a short position of KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and KRAFT.
Diversification Opportunities for NYSE Composite and KRAFT
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and KRAFT is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and KRAFT HEINZ FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT HEINZ FOODS and NYSE Composite 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 NYSE Composite are associated (or correlated) with KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT HEINZ FOODS has no effect on the direction of NYSE Composite i.e., NYSE Composite and KRAFT go up and down completely randomly.
Pair Corralation between NYSE Composite and KRAFT
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.12 times more return on investment than KRAFT. However, NYSE Composite is 2.12 times more volatile than KRAFT HEINZ FOODS. It trades about 0.09 of its potential returns per unit of risk. KRAFT HEINZ FOODS is currently generating about 0.0 per unit of risk. If you would invest 1,721,232 in NYSE Composite on November 3, 2024 and sell it today you would earn a total of 278,650 from holding NYSE Composite or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
NYSE Composite vs. KRAFT HEINZ FOODS
Performance |
| Timeline |
NYSE Composite and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
KRAFT HEINZ FOODS
Pair trading matchups for KRAFT
Pair Trading with NYSE Composite and KRAFT
The main advantage of trading using opposite NYSE Composite and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.| NYSE Composite vs. Arrow Electronics | NYSE Composite vs. Cirmaker Technology | NYSE Composite vs. Zhihu Inc ADR | NYSE Composite vs. Weibo Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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