Correlation Between Kraft Heinz and John B

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

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

Diversification Opportunities for Kraft Heinz and John B

0.34

Correlation Coefficient

Kraft Heinz  John B

Weak diversification

The 3 months correlation between Kraft and John is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo and Kraft Heinz 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 Kraft Heinz Co are associated (or correlated) with John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and John B go up and down completely randomly.

Pair Corralation between Kraft Heinz and John B

Considering the 90-day investment horizon Kraft Heinz Co is expected to generate 0.7 times more return on investment than John B. However, Kraft Heinz Co is 1.42 times less risky than John B. It trades about 0.0 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.12 per unit of risk. If you would invest  3,197  in Kraft Heinz Co on November 28, 2024 and sell it today you would lose (24.00) from holding Kraft Heinz Co or give up 0.75% of portfolio value over 90 days.

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

Kraft Heinz Co  vs.  John B Sanfilippo

Kraft Heinz

Risk-Adjusted Performance

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.

John B Sanfilippo

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Kraft Heinz and John B

The main advantage of trading using opposite Kraft Heinz and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, John B 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 John B will offset losses from the drop in John B's long position.

The idea behind Kraft Heinz Co and John B Sanfilippo 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.