Correlation Between Kellanova and Else Nutrition

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

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

Diversification Opportunities for Kellanova and Else Nutrition

-0.6

Correlation Coefficient

Kellanova  Else Nutrition

Excellent diversification

The 3 months correlation between Kellanova and Else is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Else Nutrition Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Else Nutrition Holdings and Kellanova 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 Kellanova are associated (or correlated) with Else Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Else Nutrition Holdings has no effect on the direction of Kellanova i.e., Kellanova and Else Nutrition go up and down completely randomly.

Pair Corralation between Kellanova and Else Nutrition

Taking into account the 90-day investment horizon Kellanova is expected to generate 0.14 times more return on investment than Else Nutrition. However, Kellanova is 6.99 times less risky than Else Nutrition. It trades about 0.18 of its potential returns per unit of risk. Else Nutrition Holdings is currently generating about -0.1 per unit of risk. If you would invest  5,590  in Kellanova on September 30, 2024 and sell it today you would earn a total of  2,527  from holding Kellanova or generate 45.21% return on investment over 90 days.

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

Kellanova  vs.  Else Nutrition Holdings

Kellanova

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 8 (%) 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.

Else Nutrition Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Else Nutrition Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Else Nutrition is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kellanova and Else Nutrition

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

The idea behind Kellanova and Else Nutrition Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..