Correlation Between Branded Legacy and Kellanova
Can any of the company-specific risk be diversified away by investing in both Branded Legacy 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 Branded Legacy and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Branded Legacy and Kellanova, you can compare the effects of market volatilities on Branded Legacy 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 Branded Legacy with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Branded Legacy and Kellanova.
Diversification Opportunities for Branded Legacy and Kellanova
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Branded and Kellanova is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Branded Legacy and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Branded Legacy 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 Branded Legacy 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 Branded Legacy i.e., Branded Legacy and Kellanova go up and down completely randomly.
Pair Corralation between Branded Legacy and Kellanova
Given the investment horizon of 90 days Branded Legacy is expected to generate 80.49 times more return on investment than Kellanova. However, Branded Legacy is 80.49 times more volatile than Kellanova. It trades about 0.12 of its potential returns per unit of risk. Kellanova is currently generating about 0.27 per unit of risk. If you would invest 0.05 in Branded Legacy on December 29, 2024 and sell it today you would earn a total of 0.03 from holding Branded Legacy or generate 60.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.83% |
Values | Daily Returns |
Branded Legacy vs. Kellanova
Performance |
Timeline |
Branded Legacy |
Kellanova |
Branded Legacy and Kellanova Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Branded Legacy and Kellanova
The main advantage of trading using opposite Branded Legacy and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Branded Legacy 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.Branded Legacy vs. Premier Foods Plc | Branded Legacy vs. Torque Lifestyle Brands | Branded Legacy vs. Naturally Splendid Enterprises | Branded Legacy vs. Aryzta AG PK |
Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
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 the Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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