Correlation Between SM Investments and WK Kellogg
Can any of the company-specific risk be diversified away by investing in both SM Investments 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 SM Investments and WK Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Investments and WK Kellogg Co, you can compare the effects of market volatilities on SM Investments 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 SM Investments with a short position of WK Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Investments and WK Kellogg.
Diversification Opportunities for SM Investments and WK Kellogg
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SVTMF and KLG is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SM Investments and WK Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WK Kellogg and SM Investments 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 SM Investments 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 SM Investments i.e., SM Investments and WK Kellogg go up and down completely randomly.
Pair Corralation between SM Investments and WK Kellogg
Assuming the 90 days horizon SM Investments is expected to under-perform the WK Kellogg. But the pink sheet apears to be less risky and, when comparing its historical volatility, SM Investments is 1.99 times less risky than WK Kellogg. The pink sheet trades about -0.2 of its potential returns per unit of risk. The WK Kellogg Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,808 in WK Kellogg Co on December 18, 2024 and sell it today you would earn a total of 192.00 from holding WK Kellogg Co or generate 10.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 85.0% |
Values | Daily Returns |
SM Investments vs. WK Kellogg Co
Performance |
Timeline |
SM Investments |
WK Kellogg |
SM Investments and WK Kellogg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SM Investments and WK Kellogg
The main advantage of trading using opposite SM Investments and WK Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Investments 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.SM Investments vs. Avient Corp | SM Investments vs. NiSource | SM Investments vs. Sensient Technologies | SM Investments vs. Alliant Energy Corp |
WK Kellogg vs. The Coca Cola | WK Kellogg vs. American Vanguard | WK Kellogg vs. NL Industries | WK Kellogg vs. Dow Inc |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |