Correlation Between Simply Good and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Simply Good 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 Simply Good and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simply Good Foods and Kraft Heinz Co, you can compare the effects of market volatilities on Simply Good 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 Simply Good with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simply Good and Kraft Heinz.
Diversification Opportunities for Simply Good and Kraft Heinz
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Simply and Kraft is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Simply Good Foods and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Simply Good 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 Simply Good Foods 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 Simply Good i.e., Simply Good and Kraft Heinz go up and down completely randomly.
Pair Corralation between Simply Good and Kraft Heinz
Given the investment horizon of 90 days Simply Good Foods is expected to generate 1.35 times more return on investment than Kraft Heinz. However, Simply Good is 1.35 times more volatile than Kraft Heinz Co. It trades about 0.04 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.02 per unit of risk. If you would invest 3,548 in Simply Good Foods on August 27, 2024 and sell it today you would earn a total of 353.00 from holding Simply Good Foods or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simply Good Foods vs. Kraft Heinz Co
Performance |
| Timeline |
| Simply Good Foods |
| Kraft Heinz |
Simply Good and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simply Good and Kraft Heinz
The main advantage of trading using opposite Simply Good and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simply Good 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.| Simply Good vs. Post Holdings | Simply Good vs. Treehouse Foods | Simply Good vs. J J Snack | Simply Good vs. Central Garden Pet |
| Kraft Heinz vs. Bellring Brands LLC | Kraft Heinz vs. Ingredion Incorporated | Kraft Heinz vs. Nomad Foods | Kraft Heinz vs. Post Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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