Correlation Between Kroger and Sligro Food

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

Diversification Opportunities for Kroger and Sligro Food

-0.6

Correlation Coefficient

Kroger  Sligro Food

Excellent diversification

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

Pair Corralation between Kroger and Sligro Food

Assuming the 90 days horizon The Kroger Co is expected to under-perform the Sligro Food. In addition to that, Kroger is 1.02 times more volatile than Sligro Food Group. It trades about 0.0 of its total potential returns per unit of risk. Sligro Food Group is currently generating about 0.17 per unit of volatility. If you would invest  1,158  in Sligro Food Group on April 20, 2025 and sell it today you would earn a total of  238.00  from holding Sligro Food Group or generate 20.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

The Kroger Co  vs.  Sligro Food Group

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 nearly stable basic indicators, Kroger is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sligro Food Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sligro Food Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sligro Food reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kroger and Sligro Food

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

The idea behind The Kroger Co and Sligro Food Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.