Correlation Between Kellanova and Yuenglings Ice

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

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

Diversification Opportunities for Kellanova and Yuenglings Ice

-0.63

Correlation Coefficient

Kellanova  Yuenglings Ice

Excellent diversification

The 3 months correlation between Kellanova and Yuenglings is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Yuenglings Ice Cream in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuenglings Ice Cream 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 Yuenglings Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuenglings Ice Cream has no effect on the direction of Kellanova i.e., Kellanova and Yuenglings Ice go up and down completely randomly.

Pair Corralation between Kellanova and Yuenglings Ice

Taking into account the 90-day investment horizon Kellanova is expected to generate 7.25 times less return on investment than Yuenglings Ice. But when comparing it to its historical volatility, Kellanova is 113.09 times less risky than Yuenglings Ice. It trades about 0.1 of its potential returns per unit of risk. Yuenglings Ice Cream is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.49  in Yuenglings Ice Cream on September 12, 2024 and sell it today you would lose (0.33) from holding Yuenglings Ice Cream or give up 67.35% of portfolio value over 90 days.

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

Kellanova  vs.  Yuenglings Ice Cream

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.

Yuenglings Ice Cream

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuenglings Ice Cream has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very fragile basic indicators, Yuenglings Ice may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kellanova and Yuenglings Ice

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

The idea behind Kellanova and Yuenglings Ice Cream 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.