Correlation Between Natural Grocers and Mondelez International

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

By analyzing existing cross correlation between Natural Grocers by and Mondelez International, you can compare the effects of market volatilities on Natural Grocers and Mondelez International 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 Natural Grocers with a short position of Mondelez International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Mondelez International.

Diversification Opportunities for Natural Grocers and Mondelez International

-0.25

Correlation Coefficient

Natural Grocers  Mondelez International

Very good diversification

The 3 months correlation between Natural and Mondelez is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and Mondelez International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondelez International and Natural Grocers 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 Natural Grocers by are associated (or correlated) with Mondelez International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondelez International has no effect on the direction of Natural Grocers i.e., Natural Grocers and Mondelez International go up and down completely randomly.

Pair Corralation between Natural Grocers and Mondelez International

Given the investment horizon of 90 days Natural Grocers is expected to generate 1.06 times less return on investment than Mondelez International. In addition to that, Natural Grocers is 1.95 times more volatile than Mondelez International. It trades about 0.08 of its total potential returns per unit of risk. Mondelez International is currently generating about 0.17 per unit of volatility. If you would invest  5,701  in Mondelez International on February 3, 2025 and sell it today you would earn a total of  1,074  from holding Mondelez International or generate 18.84% return on investment over 90 days.

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

Natural Grocers by  vs.  Mondelez International

Natural Grocers by

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Natural Grocers by are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Natural Grocers exhibited solid returns over the last few months and may actually be approaching a breakup point.

Mondelez International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mondelez International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Mondelez International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Natural Grocers and Mondelez International

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

The idea behind Natural Grocers by and Mondelez International 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.