Correlation Between WK Kellogg and Sysco
Can any of the company-specific risk be diversified away by investing in both WK Kellogg and Sysco 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 WK Kellogg and Sysco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WK Kellogg Co and Sysco, you can compare the effects of market volatilities on WK Kellogg and Sysco 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 WK Kellogg with a short position of Sysco. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Sysco.
Diversification Opportunities for WK Kellogg and Sysco
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KLG and Sysco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Sysco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysco and WK Kellogg 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 WK Kellogg Co are associated (or correlated) with Sysco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysco has no effect on the direction of WK Kellogg i.e., WK Kellogg and Sysco go up and down completely randomly.
Pair Corralation between WK Kellogg and Sysco
Considering the 90-day investment horizon WK Kellogg Co is expected to under-perform the Sysco. In addition to that, WK Kellogg is 4.32 times more volatile than Sysco. It trades about -0.42 of its total potential returns per unit of risk. Sysco is currently generating about -0.53 per unit of volatility. If you would invest 8,028 in Sysco on October 11, 2024 and sell it today you would lose (543.00) from holding Sysco or give up 6.76% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
WK Kellogg Co vs. Sysco
Performance |
Timeline |
WK Kellogg |
Sysco |
WK Kellogg and Sysco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WK Kellogg and Sysco
The main advantage of trading using opposite WK Kellogg and Sysco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WK Kellogg position performs unexpectedly, Sysco 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 Sysco will offset losses from the drop in Sysco's long position.WK Kellogg vs. Youdao Inc | WK Kellogg vs. Daily Journal Corp | WK Kellogg vs. Udemy Inc | WK Kellogg vs. Astral Foods Limited |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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