Correlation Between Kroger and Rede DOr

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

Diversification Opportunities for Kroger and Rede DOr

-0.6

Correlation Coefficient

Kroger  Rede DOr

Excellent diversification

The 3 months correlation between Kroger and Rede is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Kroger Co and Rede DOr So in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rede DOr So 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 Rede DOr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rede DOr So has no effect on the direction of Kroger i.e., Kroger and Rede DOr go up and down completely randomly.

Pair Corralation between Kroger and Rede DOr

Assuming the 90 days trading horizon Kroger is expected to generate 4.81 times less return on investment than Rede DOr. In addition to that, Kroger is 1.18 times more volatile than Rede DOr So. It trades about 0.01 of its total potential returns per unit of risk. Rede DOr So is currently generating about 0.07 per unit of volatility. If you would invest  3,074  in Rede DOr So on April 24, 2025 and sell it today you would earn a total of  198.00  from holding Rede DOr So or generate 6.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

The Kroger Co  vs.  Rede DOr So

The Kroger

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Kroger Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kroger is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rede DOr So

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rede DOr So are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Rede DOr may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Kroger and Rede DOr

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

The idea behind The Kroger Co and Rede DOr So 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.