Correlation Between Kraft Heinz and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Meta Platforms 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 Meta Platforms 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 Meta Platforms, you can compare the effects of market volatilities on Kraft Heinz and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Meta Platforms.
Diversification Opportunities for Kraft Heinz and Meta Platforms
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kraft and Meta is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Meta Platforms go up and down completely randomly.
Pair Corralation between Kraft Heinz and Meta Platforms
Considering the 90-day investment horizon Kraft Heinz Co is expected to generate 0.36 times more return on investment than Meta Platforms. However, Kraft Heinz Co is 2.74 times less risky than Meta Platforms. It trades about 0.0 of its potential returns per unit of risk. Meta Platforms is currently generating about -0.13 per unit of risk. If you would invest 3,850 in Kraft Heinz Co on January 20, 2024 and sell it today you would lose (139.00) from holding Kraft Heinz Co or give up 3.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.08% |
| Values | Daily Returns |
Kraft Heinz Co vs. Meta Platforms
Performance |
| Timeline |
| Kraft Heinz |
| Meta Platforms |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kraft Heinz and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and Meta Platforms
The main advantage of trading using opposite Kraft Heinz and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.| Kraft Heinz vs. Green Globe International | Kraft Heinz vs. Greenlane Holdings | Kraft Heinz vs. 22nd Century Group | Kraft Heinz vs. 1606 Corp |
| Meta Platforms vs. Meta Platforms | Meta Platforms vs. Alphabet Inc Class A | Meta Platforms vs. Twilio Inc | Meta Platforms vs. Snap Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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