Correlation Between Consumer Staples and Kellanova
Can any of the company-specific risk be diversified away by investing in both Consumer Staples 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 Consumer Staples and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consumer Staples Portfolio and Kellanova, you can compare the effects of market volatilities on Consumer Staples 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 Consumer Staples with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Staples and Kellanova.
Diversification Opportunities for Consumer Staples and Kellanova
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Consumer and Kellanova is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Staples Portfolio and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Consumer Staples 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 Consumer Staples Portfolio 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 Consumer Staples i.e., Consumer Staples and Kellanova go up and down completely randomly.
Pair Corralation between Consumer Staples and Kellanova
Assuming the 90 days horizon Consumer Staples is expected to generate 2.8 times less return on investment than Kellanova. In addition to that, Consumer Staples is 3.32 times more volatile than Kellanova. It trades about 0.01 of its total potential returns per unit of risk. Kellanova is currently generating about 0.11 per unit of volatility. If you would invest 8,005 in Kellanova on August 28, 2024 and sell it today you would earn a total of 106.00 from holding Kellanova or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consumer Staples Portfolio vs. Kellanova
Performance |
| Timeline |
| Consumer Staples Por |
| Kellanova |
Consumer Staples and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consumer Staples and Kellanova
The main advantage of trading using opposite Consumer Staples and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Staples 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.| Consumer Staples vs. Kellanova | Consumer Staples vs. Bunge Limited | Consumer Staples vs. BJs Wholesale Club | Consumer Staples vs. Colgate Palmolive |
| Kellanova vs. Bellring Brands LLC | Kellanova vs. Ingredion Incorporated | Kellanova vs. Nomad Foods | Kellanova vs. Simply Good Foods |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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