Correlation Between Mamas Creations and Kellanova

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

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

Diversification Opportunities for Mamas Creations and Kellanova

-0.81

Correlation Coefficient

Mamas Creations  Kellanova

Pay attention - limited upside

The 3 months correlation between Mamas and Kellanova is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mamas Creations and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Mamas Creations 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 Mamas Creations 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 Mamas Creations i.e., Mamas Creations and Kellanova go up and down completely randomly.

Pair Corralation between Mamas Creations and Kellanova

Given the investment horizon of 90 days Mamas Creations is expected to under-perform the Kellanova. In addition to that, Mamas Creations is 19.99 times more volatile than Kellanova. It trades about -0.08 of its total potential returns per unit of risk. Kellanova is currently generating about 0.29 per unit of volatility. If you would invest  7,979  in Kellanova on December 19, 2024 and sell it today you would earn a total of  256.00  from holding Kellanova or generate 3.21% return on investment over 90 days.

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

Mamas Creations  vs.  Kellanova

Mamas Creations

Risk-Adjusted Performance

Very Weak

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

Kellanova

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 23 (%) 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.

Pair Trading with Mamas Creations and Kellanova

The main advantage of trading using opposite Mamas Creations and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mamas Creations 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 Mamas Creations 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.

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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.