Correlation Between Kerry Group and Kraft Heinz
Can any of the company-specific risk be diversified away by investing in both Kerry Group 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 Kerry Group and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Group plc and Kraft Heinz Co, you can compare the effects of market volatilities on Kerry Group 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 Kerry Group with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Kraft Heinz.
Diversification Opportunities for Kerry Group and Kraft Heinz
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kerry and Kraft is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Kerry Group 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 Kerry Group plc 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 Kerry Group i.e., Kerry Group and Kraft Heinz go up and down completely randomly.
Pair Corralation between Kerry Group and Kraft Heinz
Assuming the 90 days horizon Kerry Group is expected to generate 5.3 times less return on investment than Kraft Heinz. In addition to that, Kerry Group is 2.16 times more volatile than Kraft Heinz Co. It trades about 0.03 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about 0.34 per unit of volatility. If you would invest 3,637 in Kraft Heinz Co on January 26, 2024 and sell it today you would earn a total of 220.00 from holding Kraft Heinz Co or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kerry Group plc vs. Kraft Heinz Co
Performance |
| Timeline |
| Kerry Group plc |
| Kraft Heinz |
Kerry Group and Kraft Heinz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and Kraft Heinz
The main advantage of trading using opposite Kerry Group and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group 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.| Kerry Group vs. Kellanova | Kerry Group vs. Lancaster Colony | Kerry Group vs. The A2 Milk | Kerry Group vs. Artisan Consumer Goods |
| Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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