Correlation Between Kroger and Diamond Hill
Can any of the company-specific risk be diversified away by investing in both Kroger and Diamond Hill 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 Diamond Hill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kroger Company and Diamond Hill Investment, you can compare the effects of market volatilities on Kroger and Diamond Hill 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 Diamond Hill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and Diamond Hill.
Diversification Opportunities for Kroger and Diamond Hill
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kroger and Diamond is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kroger Company and Diamond Hill Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Hill Investment 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 Diamond Hill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Hill Investment has no effect on the direction of Kroger i.e., Kroger and Diamond Hill go up and down completely randomly.
Pair Corralation between Kroger and Diamond Hill
Allowing for the 90-day total investment horizon Kroger Company is expected to generate 0.92 times more return on investment than Diamond Hill. However, Kroger Company is 1.09 times less risky than Diamond Hill. It trades about 0.02 of its potential returns per unit of risk. Diamond Hill Investment is currently generating about 0.0 per unit of risk. If you would invest 5,244 in Kroger Company on January 27, 2024 and sell it today you would earn a total of 347.00 from holding Kroger Company or generate 6.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kroger Company vs. Diamond Hill Investment
Performance |
| Timeline |
| Kroger Company |
| Diamond Hill Investment |
Kroger and Diamond Hill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kroger and Diamond Hill
The main advantage of trading using opposite Kroger and Diamond Hill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kroger position performs unexpectedly, Diamond Hill 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 Diamond Hill will offset losses from the drop in Diamond Hill's long position.| Kroger vs. Natural Grocers by | Kroger vs. Village Super Market | Kroger vs. Ingles Markets Incorporated | Kroger vs. Ocado Group plc |
| Diamond Hill vs. Federated Premier Municipal | Diamond Hill vs. Blackrock Muniyield | Diamond Hill vs. NXG NextGen Infrastructure | Diamond Hill vs. Federated Investors B |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |