Correlation Between Kellanova and Neogen

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

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

Diversification Opportunities for Kellanova and Neogen

-0.66

Correlation Coefficient

Kellanova  Neogen

Excellent diversification

The 3 months correlation between Kellanova and Neogen is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Kellanova i.e., Kellanova and Neogen go up and down completely randomly.

Pair Corralation between Kellanova and Neogen

Taking into account the 90-day investment horizon Kellanova is expected to generate 0.61 times more return on investment than Neogen. However, Kellanova is 1.63 times less risky than Neogen. It trades about 0.18 of its potential returns per unit of risk. Neogen is currently generating about -0.09 per unit of risk. If you would invest  5,633  in Kellanova on October 26, 2024 and sell it today you would earn a total of  2,542  from holding Kellanova or generate 45.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.19%
Values	Daily Returns

Kellanova  vs.  Neogen

Kellanova

Risk-Adjusted Performance

13 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 13 (%) 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.

Neogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neogen has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kellanova and Neogen

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

The idea behind Kellanova and Neogen 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.

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 Stocks Directory module to find actively traded stocks across global markets.