Correlation Between Yuenglings Ice and Kellanova

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

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

Diversification Opportunities for Yuenglings Ice and Kellanova

0.11

Correlation Coefficient

Yuenglings Ice  Kellanova

Average diversification

The 3 months correlation between Yuenglings and Kellanova is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yuenglings Ice Cream and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Yuenglings Ice 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 Yuenglings Ice Cream 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 Yuenglings Ice i.e., Yuenglings Ice and Kellanova go up and down completely randomly.

Pair Corralation between Yuenglings Ice and Kellanova

Given the investment horizon of 90 days Yuenglings Ice Cream is expected to generate 94.39 times more return on investment than Kellanova. However, Yuenglings Ice is 94.39 times more volatile than Kellanova. It trades about 0.08 of its potential returns per unit of risk. Kellanova is currently generating about 0.13 per unit of risk. If you would invest  0.22  in Yuenglings Ice Cream on October 24, 2024 and sell it today you would lose (0.01) from holding Yuenglings Ice Cream or give up 4.55% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Yuenglings Ice Cream  vs.  Kellanova

Yuenglings Ice Cream

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yuenglings Ice Cream are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Yuenglings Ice displayed solid returns over the last few months and may actually be approaching a breakup point.

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 Yuenglings Ice and Kellanova

The main advantage of trading using opposite Yuenglings Ice and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuenglings Ice 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 Yuenglings Ice Cream 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.