Correlation Between Kroger and JHSF Participaes

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

By analyzing existing cross correlation between The Kroger Co and JHSF Participaes SA, you can compare the effects of market volatilities on Kroger and JHSF Participaes 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 JHSF Participaes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kroger and JHSF Participaes.

Diversification Opportunities for Kroger and JHSF Participaes

-0.53

Correlation Coefficient

Kroger  JHSF Participaes

Excellent diversification

The 3 months correlation between Kroger and JHSF is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Kroger Co and JHSF Participaes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JHSF Participaes 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 The Kroger Co are associated (or correlated) with JHSF Participaes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JHSF Participaes has no effect on the direction of Kroger i.e., Kroger and JHSF Participaes go up and down completely randomly.

Pair Corralation between Kroger and JHSF Participaes

Assuming the 90 days trading horizon Kroger is expected to generate 2.52 times less return on investment than JHSF Participaes. But when comparing it to its historical volatility, The Kroger Co is 1.1 times less risky than JHSF Participaes. It trades about 0.02 of its potential returns per unit of risk. JHSF Participaes SA is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  494.00  in JHSF Participaes SA on April 25, 2025 and sell it today you would earn a total of  26.00  from holding JHSF Participaes SA or generate 5.26% return on investment over 90 days.

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

The Kroger Co  vs.  JHSF Participaes SA

The Kroger

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Kroger Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kroger is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

JHSF Participaes

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JHSF Participaes SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, JHSF Participaes may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Kroger and JHSF Participaes

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

The idea behind The Kroger Co and JHSF Participaes SA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.