Correlation Between Calbee and Kraft Heinz

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

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

Diversification Opportunities for Calbee and Kraft Heinz

0.8

Correlation Coefficient

Calbee  Kraft Heinz

Very poor diversification

The 3 months correlation between Calbee and Kraft is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Calbee Inc and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Calbee 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 Calbee Inc 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 Calbee i.e., Calbee and Kraft Heinz go up and down completely randomly.

Pair Corralation between Calbee and Kraft Heinz

Assuming the 90 days horizon Calbee Inc is expected to generate 2.97 times more return on investment than Kraft Heinz. However, Calbee is 2.97 times more volatile than Kraft Heinz Co. It trades about 0.01 of its potential returns per unit of risk. Kraft Heinz Co is currently generating about -0.06 per unit of risk. If you would invest  568.00  in Calbee Inc on September 20, 2024 and sell it today you would lose (50.00) from holding Calbee Inc or give up 8.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.47%
Values	Daily Returns

Calbee Inc  vs.  Kraft Heinz Co

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calbee Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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 uncertain performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Calbee and Kraft Heinz

The main advantage of trading using opposite Calbee and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calbee 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 Calbee Inc 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.