Correlation Between Capital Clean and WK Kellogg

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

By analyzing existing cross correlation between Capital Clean Energy and WK Kellogg Co, you can compare the effects of market volatilities on Capital Clean and WK Kellogg 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 Capital Clean with a short position of WK Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and WK Kellogg.

Diversification Opportunities for Capital Clean and WK Kellogg

0.21

Correlation Coefficient

Capital Clean  WK Kellogg

Modest diversification

The 3 months correlation between Capital and KLG is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and WK Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WK Kellogg and Capital Clean 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 Capital Clean Energy are associated (or correlated) with WK Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WK Kellogg has no effect on the direction of Capital Clean i.e., Capital Clean and WK Kellogg go up and down completely randomly.

Pair Corralation between Capital Clean and WK Kellogg

Given the investment horizon of 90 days Capital Clean is expected to generate 1.58 times less return on investment than WK Kellogg. But when comparing it to its historical volatility, Capital Clean Energy is 1.98 times less risky than WK Kellogg. It trades about 0.08 of its potential returns per unit of risk. WK Kellogg Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,808  in WK Kellogg Co on December 18, 2024 and sell it today you would earn a total of  177.00  from holding WK Kellogg Co or generate 9.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Capital Clean Energy  vs.  WK Kellogg Co

Capital Clean Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Clean Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, Capital Clean may actually be approaching a critical reversion point that can send shares even higher in April 2025.

WK Kellogg

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WK Kellogg Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating essential indicators, WK Kellogg reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capital Clean and WK Kellogg

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

The idea behind Capital Clean Energy and WK Kellogg Co 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.