Correlation Between Farmmi and Kraft Heinz

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

Diversification Opportunities for Farmmi and Kraft Heinz

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Farmmi and Kraft is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Farmmi Inc and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Farmmi 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 Farmmi Inc 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 Farmmi i.e., Farmmi and Kraft Heinz go up and down completely randomly.

Pair Corralation between Farmmi and Kraft Heinz

Given the investment horizon of 90 days Farmmi Inc is expected to under-perform the Kraft Heinz. In addition to that, Farmmi is 4.71 times more volatile than Kraft Heinz Co. It trades about -0.35 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about 0.3 per unit of volatility. If you would invest  3,514  in Kraft Heinz Co on December 30, 2023 and sell it today you would earn a total of  176.00  from holding Kraft Heinz Co or generate 5.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Farmmi Inc  vs.  Kraft Heinz Co

 Performance 
       Timeline  
Farmmi Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Farmmi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain fairly strong which may send shares a bit higher in April 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Kraft Heinz 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Farmmi and Kraft Heinz Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Farmmi and Kraft Heinz

The main advantage of trading using opposite Farmmi and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmmi 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 Farmmi Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Stocks Directory
Find actively traded stocks across global markets
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Insider Screener
Find insiders across different sectors to evaluate their impact on performance