Correlation Between Kellanova and Simon Property

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

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

Diversification Opportunities for Kellanova and Simon Property

-0.36

Correlation Coefficient

Kellanova  Simon Property

Very good diversification

The 3 months correlation between Kellanova and Simon is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group 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 Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of Kellanova i.e., Kellanova and Simon Property go up and down completely randomly.

Pair Corralation between Kellanova and Simon Property

Taking into account the 90-day investment horizon Kellanova is expected to generate 0.16 times more return on investment than Simon Property. However, Kellanova is 6.08 times less risky than Simon Property. It trades about 0.28 of its potential returns per unit of risk. Simon Property Group is currently generating about -0.02 per unit of risk. If you would invest  7,995  in Kellanova on December 20, 2024 and sell it today you would earn a total of  240.00  from holding Kellanova or generate 3.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Kellanova  vs.  Simon Property Group

Kellanova

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 21 (%) 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.

Simon Property Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simon Property Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady technical and fundamental indicators, Simon Property is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Kellanova and Simon Property

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

The idea behind Kellanova and Simon Property Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..