Correlation Between Kraft Heinz and Kellanova

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

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

Diversification Opportunities for Kraft Heinz and Kellanova

-0.31

Correlation Coefficient

Kraft Heinz  Kellanova

Very good diversification

The 3 months correlation between Kraft and Kellanova is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Kraft Heinz and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Kraft Heinz 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 The Kraft Heinz are associated (or correlated) with Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Kellanova go up and down completely randomly.

Pair Corralation between Kraft Heinz and Kellanova

Assuming the 90 days trading horizon The Kraft Heinz is expected to under-perform the Kellanova. In addition to that, Kraft Heinz is 3.08 times more volatile than Kellanova. It trades about -0.23 of its total potential returns per unit of risk. Kellanova is currently generating about 0.07 per unit of volatility. If you would invest  24,624  in Kellanova on October 15, 2024 and sell it today you would earn a total of  187.00  from holding Kellanova or generate 0.76% return on investment over 90 days.

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

The Kraft Heinz  vs.  Kellanova

Kraft Heinz

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Kraft Heinz has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kellanova

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Kellanova may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kraft Heinz and Kellanova

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

The idea behind The Kraft Heinz and Kellanova 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.