Correlation Between Danone SA and Kellanova
Can any of the company-specific risk be diversified away by investing in both Danone SA 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 Danone SA and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danone SA and Kellanova, you can compare the effects of market volatilities on Danone SA 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 Danone SA with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danone SA and Kellanova.
Diversification Opportunities for Danone SA and Kellanova
Significant diversification
The 3 months correlation between Danone and Kellanova is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Danone SA and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Danone SA 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 Danone SA 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 Danone SA i.e., Danone SA and Kellanova go up and down completely randomly.
Pair Corralation between Danone SA and Kellanova
Assuming the 90 days horizon Danone SA is expected to under-perform the Kellanova. In addition to that, Danone SA is 5.79 times more volatile than Kellanova. It trades about -0.07 of its total potential returns per unit of risk. Kellanova is currently generating about 0.05 per unit of volatility. If you would invest 8,078 in Kellanova on August 28, 2024 and sell it today you would earn a total of 35.00 from holding Kellanova or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danone SA vs. Kellanova
Performance |
| Timeline |
| Danone SA |
| Kellanova |
Danone SA and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danone SA and Kellanova
The main advantage of trading using opposite Danone SA and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danone SA 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.| Danone SA vs. Lifevantage | Danone SA vs. Simply Good Foods | Danone SA vs. Bellring Brands LLC | Danone SA vs. Seneca Foods Corp |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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