Correlation Between Seven I and Kroger
Can any of the company-specific risk be diversified away by investing in both Seven I 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 Seven I and Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven i Holdings and The Kroger Co, you can compare the effects of market volatilities on Seven I 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 Seven I with a short position of Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven I and Kroger.
Diversification Opportunities for Seven I and Kroger
Very weak diversification
The 3 months correlation between Seven and Kroger is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Seven i Holdings and The Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Kroger and Seven I 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 Seven i Holdings 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 Seven I i.e., Seven I and Kroger go up and down completely randomly.
Pair Corralation between Seven I and Kroger
Assuming the 90 days horizon Seven i Holdings is expected to generate 1.66 times more return on investment than Kroger. However, Seven I is 1.66 times more volatile than The Kroger Co. It trades about 0.01 of its potential returns per unit of risk. The Kroger Co is currently generating about -0.06 per unit of risk. If you would invest 1,517 in Seven i Holdings on November 3, 2024 and sell it today you would earn a total of 3.00 from holding Seven i Holdings or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seven i Holdings vs. The Kroger Co
Performance |
| Timeline |
| Seven i Holdings |
| The Kroger |
Seven I and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven I and Kroger
The main advantage of trading using opposite Seven I and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven I 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.| Seven I vs. Easy Software AG | Seven I vs. Entravision Communications | Seven I vs. Telecom Argentina SA | Seven I vs. Verizon Communications |
| Kroger vs. Eurasia Mining Plc | Kroger vs. MAGNUM MINING EXP | Kroger vs. ANGLO ASIAN MINING | Kroger vs. De Grey Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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