Correlation Between Hershey Foods and ALBERTSONS INC

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Can any of the company-specific risk be diversified away by investing in both Hershey Foods and ALBERTSONS INC 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 Hershey Foods and ALBERTSONS INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hershey Foods Corp and ALBERTSONS INC, you can compare the effects of market volatilities on Hershey Foods and ALBERTSONS INC 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 Hershey Foods with a short position of ALBERTSONS INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hershey Foods and ALBERTSONS INC.

Diversification Opportunities for Hershey Foods and ALBERTSONS INC

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Hershey and ALBERTSONS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hershey Foods Corp and ALBERTSONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALBERTSONS INC and Hershey Foods 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 Hershey Foods Corp are associated (or correlated) with ALBERTSONS INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALBERTSONS INC has no effect on the direction of Hershey Foods i.e., Hershey Foods and ALBERTSONS INC go up and down completely randomly.

Pair Corralation between Hershey Foods and ALBERTSONS INC

If you would invest  12,667  in Hershey Foods Corp on April 5, 2022 and sell it today you would earn a total of  9,433  from holding Hershey Foods Corp or generate 74.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Hershey Foods Corp  vs.  ALBERTSONS INC

 Performance (%) 
      Timeline 
Hershey Foods Corp 
Hershey Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hershey Foods Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Hershey Foods is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0163
Payout Ratio
0.46
Last Split Factor
2:1
Forward Annual Dividend Rate
3.6
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-19
Last Split Date
2004-06-16

Hershey Price Channel

ALBERTSONS INC 
ALBERTSONS Performance
0 of 100
Over the last 90 days ALBERTSONS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, ALBERTSONS INC is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Hershey Foods and ALBERTSONS INC Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Hershey Foods and ALBERTSONS INC

The main advantage of trading using opposite Hershey Foods and ALBERTSONS INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hershey Foods position performs unexpectedly, ALBERTSONS INC 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 ALBERTSONS INC will offset losses from the drop in ALBERTSONS INC's long position.
The idea behind Hershey Foods Corp and ALBERTSONS INC 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.
Check out your portfolio center. 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 Bond Directory module to find actively traded corporate debentures issued by US companies.

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