Correlation Between Kraft Heinz and Farmmi
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Farmmi 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 Kraft Heinz and Farmmi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and Farmmi Inc, you can compare the effects of market volatilities on Kraft Heinz and Farmmi 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 Kraft Heinz with a short position of Farmmi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Farmmi.
Diversification Opportunities for Kraft Heinz and Farmmi
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kraft and Farmmi is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Farmmi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmmi Inc and Kraft Heinz 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 Kraft Heinz Co are associated (or correlated) with Farmmi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmmi Inc has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Farmmi go up and down completely randomly.
Pair Corralation between Kraft Heinz and Farmmi
Considering the 90-day investment horizon Kraft Heinz Co is expected to generate 0.22 times more return on investment than Farmmi. However, Kraft Heinz Co is 4.45 times less risky than Farmmi. It trades about 0.31 of its potential returns per unit of risk. Farmmi Inc is currently generating about -0.17 per unit of risk. If you would invest 3,535 in Kraft Heinz Co on January 20, 2024 and sell it today you would earn a total of 176.00 from holding Kraft Heinz Co or generate 4.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kraft Heinz Co vs. Farmmi Inc
Performance |
Timeline |
Kraft Heinz |
Farmmi Inc |
Kraft Heinz and Farmmi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kraft Heinz and Farmmi
The main advantage of trading using opposite Kraft Heinz and Farmmi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Farmmi 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 Farmmi will offset losses from the drop in Farmmi's long position.Kraft Heinz vs. Green Globe International | Kraft Heinz vs. Greenlane Holdings | Kraft Heinz vs. 22nd Century Group | Kraft Heinz vs. 1606 Corp |
Farmmi vs. Green Globe International | Farmmi vs. Greenlane Holdings | Farmmi vs. 22nd Century Group | Farmmi vs. 1606 Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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