Correlation Between Kraft Heinz and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Kraft Heinz and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Dow Jones.
Diversification Opportunities for Kraft Heinz and Dow Jones
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kraft and Dow is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Dow Jones go up and down completely randomly.
Pair Corralation between Kraft Heinz and Dow Jones
Assuming the 90 days trading horizon Kraft Heinz Co is expected to generate 2.55 times more return on investment than Dow Jones. However, Kraft Heinz is 2.55 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.02 per unit of risk. If you would invest 2,999 in Kraft Heinz Co on September 15, 2024 and sell it today you would earn a total of 28.00 from holding Kraft Heinz Co or generate 0.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Kraft Heinz Co vs. Dow Jones Industrial
Performance |
Timeline |
Kraft Heinz and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Kraft Heinz Co
Pair trading matchups for Kraft Heinz
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kraft Heinz and Dow Jones
The main advantage of trading using opposite Kraft Heinz and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Kraft Heinz vs. Tencent Music Entertainment | Kraft Heinz vs. FANDIFI TECHNOLOGY P | Kraft Heinz vs. Micron Technology | Kraft Heinz vs. Aedas Homes SA |
Dow Jones vs. Wallbox NV | Dow Jones vs. LithiumBank Resources Corp | Dow Jones vs. Marine Products | Dow Jones vs. Arrow Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |