Correlation Between Kraft Heinz and First Trust
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and First Trust 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 First Trust 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 First Trust, you can compare the effects of market volatilities on Kraft Heinz and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and First Trust.
Diversification Opportunities for Kraft Heinz and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kraft and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and First Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and First Trust go up and down completely randomly.
Pair Corralation between Kraft Heinz and First Trust
If you would invest 3,618 in Kraft Heinz Co on January 25, 2024 and sell it today you would earn a total of 189.00 from holding Kraft Heinz Co or generate 5.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Kraft Heinz Co vs. First Trust
Performance |
Timeline |
Kraft Heinz |
First Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kraft Heinz and First Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kraft Heinz and First Trust
The main advantage of trading using opposite Kraft Heinz and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.Kraft Heinz vs. General Mills | Kraft Heinz vs. Campbell Soup | Kraft Heinz vs. ConAgra Foods | Kraft Heinz vs. Hormel Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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