Correlation Between IShares MSCI and Kraft Heinz

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both IShares MSCI 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 IShares MSCI and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IShares MSCI EAFE and Kraft Heinz Co, you can compare the effects of market volatilities on IShares MSCI 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 IShares MSCI with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Kraft Heinz.

Diversification Opportunities for IShares MSCI and Kraft Heinz

-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between IShares and Kraft is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding IShares MSCI EAFE and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and IShares MSCI 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 IShares MSCI EAFE 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 IShares MSCI i.e., IShares MSCI and Kraft Heinz go up and down completely randomly.

Pair Corralation between IShares MSCI and Kraft Heinz

Given the investment horizon of 90 days IShares MSCI is expected to generate 1.77 times less return on investment than Kraft Heinz. But when comparing it to its historical volatility, IShares MSCI EAFE is 1.73 times less risky than Kraft Heinz. It trades about 0.19 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  3,539  in Kraft Heinz Co on December 29, 2023 and sell it today you would earn a total of  114.00  from holding Kraft Heinz Co or generate 3.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

IShares MSCI EAFE  vs.  Kraft Heinz Co

 Performance 
       Timeline  
IShares MSCI EAFE 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in IShares MSCI EAFE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, IShares MSCI is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Kraft Heinz 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Kraft Heinz Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Kraft Heinz is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

IShares MSCI and Kraft Heinz Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares MSCI and Kraft Heinz

The main advantage of trading using opposite IShares MSCI and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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.
The idea behind IShares MSCI EAFE and Kraft Heinz Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world