Correlation Between Camil Alimentos and Kraft Heinz

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

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

Diversification Opportunities for Camil Alimentos and Kraft Heinz

0.21

Correlation Coefficient

Camil Alimentos  Kraft Heinz

Modest diversification

The 3 months correlation between Camil and Kraft is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Camil Alimentos SA and The Kraft Heinz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Camil Alimentos 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 Camil Alimentos SA 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 Camil Alimentos i.e., Camil Alimentos and Kraft Heinz go up and down completely randomly.

Pair Corralation between Camil Alimentos and Kraft Heinz

Assuming the 90 days trading horizon Camil Alimentos SA is expected to under-perform the Kraft Heinz. But the stock apears to be less risky and, when comparing its historical volatility, Camil Alimentos SA is 1.04 times less risky than Kraft Heinz. The stock trades about -0.34 of its potential returns per unit of risk. The The Kraft Heinz is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  4,955  in The Kraft Heinz on September 26, 2024 and sell it today you would lose (255.00) from holding The Kraft Heinz or give up 5.15% of portfolio value over 90 days.

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

Camil Alimentos SA  vs.  The Kraft Heinz

Camil Alimentos SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camil Alimentos SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kraft Heinz

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Kraft Heinz are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Kraft Heinz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Camil Alimentos and Kraft Heinz

The main advantage of trading using opposite Camil Alimentos and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camil Alimentos 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 Camil Alimentos SA and The Kraft Heinz 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.