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

-0.35

Correlation Coefficient

Kraft Heinz  Kellanova

Very good diversification

The 3 months correlation between Kraft and Kellanova is -0.35. 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 Kraft Heinz is expected to generate 1.04 times less return on investment than Kellanova. In addition to that, Kraft Heinz is 1.58 times more volatile than Kellanova. It trades about 0.13 of its total potential returns per unit of risk. Kellanova is currently generating about 0.21 per unit of volatility. If you would invest  24,240  in Kellanova on October 6, 2024 and sell it today you would earn a total of  750.00  from holding Kellanova or generate 3.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.47%
Values	Daily Returns

The Kraft Heinz  vs.  Kellanova

Kraft Heinz

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Kraft Heinz are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Kraft Heinz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kellanova

Risk-Adjusted Performance

13 of 100

Good

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 somewhat weak technical and fundamental indicators, Kellanova sustained solid returns over the last few months and may actually be approaching a breakup point.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.