Correlation Between Kraft Heinz and ATT
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Kraft Heinz and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and ATT.
Diversification Opportunities for Kraft Heinz and ATT
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kraft and ATT is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and ATT go up and down completely randomly.
Pair Corralation between Kraft Heinz and ATT
Considering the 90-day investment horizon Kraft Heinz is expected to generate 1.87 times less return on investment than ATT. But when comparing it to its historical volatility, Kraft Heinz Co is 1.15 times less risky than ATT. It trades about 0.05 of its potential returns per unit of risk. ATT Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,373 in ATT Inc on January 24, 2024 and sell it today you would earn a total of 258.00 from holding ATT Inc or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. ATT Inc
Performance |
| Timeline |
| Kraft Heinz |
| ATT Inc |
Kraft Heinz and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and ATT
The main advantage of trading using opposite Kraft Heinz and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.| Kraft Heinz vs. Bunge Limited | Kraft Heinz vs. Archer Daniels Midland | Kraft Heinz vs. Fresh Del Monte | Kraft Heinz vs. Limoneira Co |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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