Correlation Between Ion Beam and Kellogg
Can any of the company-specific risk be diversified away by investing in both Ion Beam and 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 Ion Beam and Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ion Beam Applications and Kellogg Co, you can compare the effects of market volatilities on Ion Beam and 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 Ion Beam with a short position of Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Kellogg.
Diversification Opportunities for Ion Beam and Kellogg
Average diversification
The 3 months correlation between Ion and Kellogg is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg and Ion Beam 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 Ion Beam Applications are associated (or correlated) with Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg has no effect on the direction of Ion Beam i.e., Ion Beam and Kellogg go up and down completely randomly.
Pair Corralation between Ion Beam and Kellogg
Assuming the 90 days trading horizon Ion Beam is expected to generate 1.65 times less return on investment than Kellogg. In addition to that, Ion Beam is 1.65 times more volatile than Kellogg Co. It trades about 0.04 of its total potential returns per unit of risk. Kellogg Co is currently generating about 0.12 per unit of volatility. If you would invest 5,171 in Kellogg Co on September 14, 2024 and sell it today you would earn a total of 2,912 from holding Kellogg Co or generate 56.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Ion Beam Applications vs. Kellogg Co
Performance |
| Timeline |
| Ion Beam Applications |
| Kellogg |
Ion Beam and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Kellogg
The main advantage of trading using opposite Ion Beam and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam position performs unexpectedly, 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 Kellogg will offset losses from the drop in Kellogg's long position.| Ion Beam vs. Finnair Oyj | Ion Beam vs. Wizz Air Holdings | Ion Beam vs. Infrastrutture Wireless Italiane | Ion Beam vs. Associated British Foods |
| Kellogg vs. Ion Beam Applications | Kellogg vs. Fidelity National Information | Kellogg vs. Abingdon Health Plc | Kellogg vs. MyHealthChecked Plc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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