Correlation Between Grand Havana and Kraft Heinz

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

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

Diversification Opportunities for Grand Havana and Kraft Heinz

0.1

Correlation Coefficient

Grand Havana  Kraft Heinz

Average diversification

The 3 months correlation between Grand and Kraft is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Grand Havana and Kraft Heinz Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Heinz and Grand Havana 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 Grand Havana 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 Grand Havana i.e., Grand Havana and Kraft Heinz go up and down completely randomly.

Pair Corralation between Grand Havana and Kraft Heinz

Given the investment horizon of 90 days Grand Havana is expected to generate 6.06 times more return on investment than Kraft Heinz. However, Grand Havana is 6.06 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 -0.03 per unit of risk. If you would invest  0.06  in Grand Havana on December 24, 2024 and sell it today you would lose (0.01) from holding Grand Havana or give up 16.67% of portfolio value over 90 days.

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

Grand Havana  vs.  Kraft Heinz Co

Grand Havana

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Havana are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Grand Havana may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Kraft Heinz

Risk-Adjusted Performance

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 Grand Havana and Kraft Heinz

The main advantage of trading using opposite Grand Havana and Kraft Heinz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Havana 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 Grand Havana 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.