Correlation Between Kraft Heinz and WH Group

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Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and WH Group 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 WH Group 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 WH Group, you can compare the effects of market volatilities on Kraft Heinz and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and WH Group.

Diversification Opportunities for Kraft Heinz and WH Group

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Kraft and WHGLY is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and WH Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and WH Group go up and down completely randomly.

Pair Corralation between Kraft Heinz and WH Group

Considering the 90-day investment horizon Kraft Heinz is expected to generate 10.13 times less return on investment than WH Group. But when comparing it to its historical volatility, Kraft Heinz Co is 1.3 times less risky than WH Group. It trades about 0.0 of its potential returns per unit of risk. WH Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,170  in WH Group on December 30, 2023 and sell it today you would earn a total of  158.00  from holding WH Group or generate 13.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kraft Heinz Co  vs.  WH Group Ltd

 Performance 
       Timeline  
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.
WH Group 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in WH Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, WH Group may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Kraft Heinz and WH Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kraft Heinz and WH Group

The main advantage of trading using opposite Kraft Heinz and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.
The idea behind Kraft Heinz Co and WH Group 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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