Correlation Between MEDIFAST INC and Kellanova

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

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

Diversification Opportunities for MEDIFAST INC and Kellanova

0.02

Correlation Coefficient

MEDIFAST INC  Kellanova

Significant diversification

The 3 months correlation between MEDIFAST and Kellanova is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding MEDIFAST INC and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and MEDIFAST INC 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 MEDIFAST INC 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 MEDIFAST INC i.e., MEDIFAST INC and Kellanova go up and down completely randomly.

Pair Corralation between MEDIFAST INC and Kellanova

Considering the 90-day investment horizon MEDIFAST INC is expected to under-perform the Kellanova. In addition to that, MEDIFAST INC is 15.82 times more volatile than Kellanova. It trades about -0.4 of its total potential returns per unit of risk. Kellanova is currently generating about 0.26 per unit of volatility. If you would invest  8,058  in Kellanova on October 10, 2024 and sell it today you would earn a total of  77.00  from holding Kellanova or generate 0.96% return on investment over 90 days.

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

MEDIFAST INC  vs.  Kellanova

MEDIFAST INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MEDIFAST INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Kellanova

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 10 (%) 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 MEDIFAST INC and Kellanova

The main advantage of trading using opposite MEDIFAST INC and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIFAST INC 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 MEDIFAST INC 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..