Correlation Between Kraft Heinz and WH Group
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and WH Group 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 WH Group 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 WH Group Limited, you can compare the effects of market volatilities on Kraft Heinz and WH Group 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and WH Group.
Diversification Opportunities for Kraft Heinz and WH Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kraft and WHGRF is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and WH Group go up and down completely randomly.
Pair Corralation between Kraft Heinz and WH Group
Considering the 90-day investment horizon Kraft Heinz Co is expected to under-perform the WH Group. But the stock apears to be less risky and, when comparing its historical volatility, Kraft Heinz Co is 1.11 times less risky than WH Group. The stock trades about -0.25 of its potential returns per unit of risk. The WH Group Limited is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 80.00 in WH Group Limited on September 6, 2024 and sell it today you would lose (1.00) from holding WH Group Limited or give up 1.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kraft Heinz Co vs. WH Group Limited
Performance |
Timeline |
Kraft Heinz |
WH Group Limited |
Kraft Heinz and WH Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kraft Heinz and WH Group
The main advantage of trading using opposite Kraft Heinz and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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