Correlation Between Kroger and Hain Celestial

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

By analyzing existing cross correlation between Kroger Company and The Hain Celestial, you can compare the effects of market volatilities on Kroger and Hain Celestial 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 Kroger with a short position of Hain Celestial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Hain Celestial.

Diversification Opportunities for Kroger and Hain Celestial

-0.67

Correlation Coefficient

Kroger  Hain Celestial

Excellent diversification

The 3 months correlation between Kroger and Hain is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and The Hain Celestial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hain Celestial and Kroger 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 Kroger Company are associated (or correlated) with Hain Celestial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hain Celestial has no effect on the direction of Kroger i.e., Kroger and Hain Celestial go up and down completely randomly.

Pair Corralation between Kroger and Hain Celestial

Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.42 times more return on investment than Hain Celestial. However, Kroger Company is 2.39 times less risky than Hain Celestial. It trades about 0.05 of its potential returns per unit of risk. The Hain Celestial is currently generating about -0.05 per unit of risk. If you would invest  4,635  in Kroger Company on October 5, 2024 and sell it today you would earn a total of  1,553  from holding Kroger Company or generate 33.51% return on investment over 90 days.

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

Kroger Company  vs.  The Hain Celestial

Kroger Company

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kroger Company are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Kroger may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Hain Celestial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Hain Celestial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kroger and Hain Celestial

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

The idea behind Kroger Company and The Hain Celestial 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.