Correlation Between Sysco and Kellanova

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

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

Diversification Opportunities for Sysco and Kellanova

0.36

Correlation Coefficient

Sysco  Kellanova

Weak diversification

The 3 months correlation between Sysco and Kellanova is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sysco and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Sysco 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 Sysco 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 Sysco i.e., Sysco and Kellanova go up and down completely randomly.

Pair Corralation between Sysco and Kellanova

Considering the 90-day investment horizon Sysco is expected to under-perform the Kellanova. In addition to that, Sysco is 3.36 times more volatile than Kellanova. It trades about -0.53 of its total potential returns per unit of risk. Kellanova is currently generating about 0.27 per unit of volatility. If you would invest  8,070  in Kellanova on October 11, 2024 and sell it today you would earn a total of  84.00  from holding Kellanova or generate 1.04% return on investment over 90 days.

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

Sysco  vs.  Kellanova

Sysco

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sysco are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kellanova

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 12 (%) 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 Sysco and Kellanova

The main advantage of trading using opposite Sysco and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysco 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 Sysco 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.