Correlation Between Smart For and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Smart For and Kraft Heinz 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 Smart For and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smart for Life, and Kraft Heinz Co, you can compare the effects of market volatilities on Smart For and Kraft Heinz 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 Smart For with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smart For and Kraft Heinz.
Diversification Opportunities for Smart For and Kraft Heinz
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Smart and Kraft is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Smart for Life, and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Smart For 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 Smart for Life, are associated (or correlated) with Kraft Heinz. 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 has no effect on the direction of Smart For i.e., Smart For and Kraft Heinz go up and down completely randomly.
Pair Corralation between Smart For and Kraft Heinz
Given the investment horizon of 90 days Smart for Life, is expected to under-perform the Kraft Heinz. In addition to that, Smart For is 23.82 times more volatile than Kraft Heinz Co. It trades about -0.38 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.13 per unit of volatility. If you would invest 3,499 in Kraft Heinz Co on August 28, 2024 and sell it today you would lose (297.00) from holding Kraft Heinz Co or give up 8.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 34.92% |
| Values | Daily Returns |
Smart for Life, vs. Kraft Heinz Co
Performance |
| Timeline |
| Smart for Life, |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kraft Heinz |
Smart For and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smart For and Kraft Heinz
The main advantage of trading using opposite Smart For and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart For position performs unexpectedly, Kraft Heinz 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 Heinz will offset losses from the drop in Kraft Heinz's long position.| Smart For vs. Bit Origin | Smart For vs. Better Choice | Smart For vs. Farmmi Inc | Smart For vs. Laird Superfood |
| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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