Correlation Between Greencore Group and Kellanova
Can any of the company-specific risk be diversified away by investing in both Greencore Group 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 Greencore Group and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greencore Group PLC and Kellanova, you can compare the effects of market volatilities on Greencore Group 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 Greencore Group with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greencore Group and Kellanova.
Diversification Opportunities for Greencore Group and Kellanova
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greencore and Kellanova is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Greencore Group PLC and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Greencore Group 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 Greencore Group PLC 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 Greencore Group i.e., Greencore Group and Kellanova go up and down completely randomly.
Pair Corralation between Greencore Group and Kellanova
Assuming the 90 days horizon Greencore Group PLC is expected to generate 2.48 times more return on investment than Kellanova. However, Greencore Group is 2.48 times more volatile than Kellanova. It trades about 0.09 of its potential returns per unit of risk. Kellanova is currently generating about 0.08 per unit of risk. If you would invest 441.00 in Greencore Group PLC on September 12, 2024 and sell it today you would earn a total of 679.00 from holding Greencore Group PLC or generate 153.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greencore Group PLC vs. Kellanova
Performance |
| Timeline |
| Greencore Group PLC |
| Kellanova |
Greencore Group and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greencore Group and Kellanova
The main advantage of trading using opposite Greencore Group and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greencore Group 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.| Greencore Group vs. Cedar Realty Trust | Greencore Group vs. Getty Realty | Greencore Group vs. Asbury Automotive Group | Greencore Group vs. WEBTOON Entertainment Common |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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