Correlation Between Calbee and Kellanova

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

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

Diversification Opportunities for Calbee and Kellanova

-0.4

Correlation Coefficient

Calbee  Kellanova

Very good diversification

The 3 months correlation between Calbee and Kellanova is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Calbee Inc and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Calbee 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 Calbee Inc 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 Calbee i.e., Calbee and Kellanova go up and down completely randomly.

Pair Corralation between Calbee and Kellanova

Assuming the 90 days horizon Calbee is expected to generate 11.58 times less return on investment than Kellanova. In addition to that, Calbee is 2.2 times more volatile than Kellanova. It trades about 0.01 of its total potential returns per unit of risk. Kellanova is currently generating about 0.13 per unit of volatility. If you would invest  5,436  in Kellanova on September 20, 2024 and sell it today you would earn a total of  2,598  from holding Kellanova or generate 47.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.47%
Values	Daily Returns

Calbee Inc  vs.  Kellanova

Calbee Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calbee Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kellanova

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 1 (%) 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 Calbee and Kellanova

The main advantage of trading using opposite Calbee and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calbee 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 Calbee Inc 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.