Correlation Between Adia Nutrition and Kellanova

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

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

Diversification Opportunities for Adia Nutrition and Kellanova

0.67

Correlation Coefficient

Adia Nutrition  Kellanova

Poor diversification

The 3 months correlation between Adia and Kellanova is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Adia Nutrition and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Adia Nutrition 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 Adia Nutrition are associated (or correlated) with Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of Adia Nutrition i.e., Adia Nutrition and Kellanova go up and down completely randomly.

Pair Corralation between Adia Nutrition and Kellanova

Given the investment horizon of 90 days Adia Nutrition is expected to generate 49.51 times more return on investment than Kellanova. However, Adia Nutrition is 49.51 times more volatile than Kellanova. It trades about 0.31 of its potential returns per unit of risk. Kellanova is currently generating about 0.29 per unit of risk. If you would invest  0.60  in Adia Nutrition on October 25, 2024 and sell it today you would earn a total of  0.40  from holding Adia Nutrition or generate 66.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Adia Nutrition  vs.  Kellanova

Adia Nutrition

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adia Nutrition are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Adia Nutrition sustained solid returns over the last few months and may actually be approaching a breakup point.

Kellanova

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Kellanova is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Adia Nutrition and Kellanova

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

The idea behind Adia Nutrition and Kellanova 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.