Correlation Between Kellanova and NUZE Old

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

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

Diversification Opportunities for Kellanova and NUZE Old

-0.73

Correlation Coefficient

Kellanova  NUZE Old

Pay attention - limited upside

The 3 months correlation between Kellanova and NUZE is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and NUZE Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NUZE Old 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 NUZE Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NUZE Old has no effect on the direction of Kellanova i.e., Kellanova and NUZE Old go up and down completely randomly.

Pair Corralation between Kellanova and NUZE Old

Taking into account the 90-day investment horizon Kellanova is expected to generate 390.36 times less return on investment than NUZE Old. But when comparing it to its historical volatility, Kellanova is 435.41 times less risky than NUZE Old. It trades about 0.11 of its potential returns per unit of risk. NUZE Old is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  130.00  in NUZE Old on September 4, 2024 and sell it today you would lose (31.00) from holding NUZE Old or give up 23.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	67.19%
Values	Daily Returns

Kellanova  vs.  NUZE Old

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.

NUZE Old

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days NUZE Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather fragile basic indicators, NUZE Old exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kellanova and NUZE Old

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

The idea behind Kellanova and NUZE Old 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.