Correlation Between Kraft Heinz and Comvita

Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Comvita 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 Comvita 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 Comvita Limited, you can compare the effects of market volatilities on Kraft Heinz and Comvita 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 Comvita. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Comvita.

Diversification Opportunities for Kraft Heinz and Comvita

-0.62

Correlation Coefficient

Kraft Heinz  Comvita

Excellent diversification

The 3 months correlation between Kraft and Comvita is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Comvita Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comvita Limited 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 Comvita. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comvita Limited has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Comvita go up and down completely randomly.

Pair Corralation between Kraft Heinz and Comvita

If you would invest  156.00  in Comvita Limited on February 23, 2024 and sell it today you would earn a total of  0.00  from holding Comvita Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Kraft Heinz Co  vs.  Comvita Limited

Kraft Heinz

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kraft Heinz Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Kraft Heinz is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Comvita Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Comvita Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kraft Heinz and Comvita

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

The idea behind Kraft Heinz Co and Comvita Limited 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.