Correlation Between MDB Capital and WK Kellogg

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

By analyzing existing cross correlation between MDB Capital Holdings, and WK Kellogg Co, you can compare the effects of market volatilities on MDB Capital and WK Kellogg 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 MDB Capital with a short position of WK Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of MDB Capital and WK Kellogg.

Diversification Opportunities for MDB Capital and WK Kellogg

0.08

Correlation Coefficient

MDB Capital  WK Kellogg

Significant diversification

The 3 months correlation between MDB and KLG is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding MDB Capital Holdings, and WK Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WK Kellogg and MDB Capital 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 MDB Capital Holdings, are associated (or correlated) with WK Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WK Kellogg has no effect on the direction of MDB Capital i.e., MDB Capital and WK Kellogg go up and down completely randomly.

Pair Corralation between MDB Capital and WK Kellogg

Given the investment horizon of 90 days MDB Capital Holdings, is expected to generate 0.99 times more return on investment than WK Kellogg. However, MDB Capital Holdings, is 1.01 times less risky than WK Kellogg. It trades about -0.01 of its potential returns per unit of risk. WK Kellogg Co is currently generating about -0.4 per unit of risk. If you would invest  651.00  in MDB Capital Holdings, on October 10, 2024 and sell it today you would lose (10.00) from holding MDB Capital Holdings, or give up 1.54% of portfolio value over 90 days.

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

MDB Capital Holdings,  vs.  WK Kellogg Co

MDB Capital Holdings,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MDB Capital Holdings, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, MDB Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

WK Kellogg

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days WK Kellogg Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, WK Kellogg is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with MDB Capital and WK Kellogg

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

The idea behind MDB Capital Holdings, and WK Kellogg Co 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.