Correlation Between Blue Star and Kraft Heinz

Can any of the company-specific risk be diversified away by investing in both Blue Star 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 Blue Star and Kraft Heinz into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Star Foods and Kraft Heinz Co, you can compare the effects of market volatilities on Blue Star 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 Blue Star with a short position of Kraft Heinz. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and Kraft Heinz.

Diversification Opportunities for Blue Star and Kraft Heinz

0.11

Correlation Coefficient

Blue Star  Kraft Heinz

Average diversification

The 3 months correlation between Blue and Kraft is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Blue Star 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 Blue Star Foods 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 Blue Star i.e., Blue Star and Kraft Heinz go up and down completely randomly.

Pair Corralation between Blue Star and Kraft Heinz

Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the Kraft Heinz. In addition to that, Blue Star is 8.3 times more volatile than Kraft Heinz Co. It trades about -0.22 of its total potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.09 per unit of volatility. If you would invest  3,487  in Kraft Heinz Co on August 9, 2024 and sell it today you would lose (205.00) from holding Kraft Heinz Co or give up 5.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Blue Star Foods  vs.  Kraft Heinz Co

Blue Star Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Star Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in December 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kraft Heinz

Risk-Adjusted Performance

0 of 100

Very 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blue Star and Kraft Heinz

The main advantage of trading using opposite Blue Star and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star 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 Blue Star Foods 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.