Correlation Between Emmi AG and Kraft Heinz

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

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

Diversification Opportunities for Emmi AG and Kraft Heinz

0.48

Correlation Coefficient

Emmi AG  Kraft Heinz

Very weak diversification

The 3 months correlation between Emmi and Kraft is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Emmi AG and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Emmi AG 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 Emmi AG 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 Emmi AG i.e., Emmi AG and Kraft Heinz go up and down completely randomly.

Pair Corralation between Emmi AG and Kraft Heinz

If you would invest  99,000  in Emmi AG on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Emmi AG or generate 0.0% return on investment over 90 days.

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

Emmi AG  vs.  Kraft Heinz Co

Emmi AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Emmi AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Emmi AG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Emmi AG and Kraft Heinz

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

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.