Correlation Between J J and Kellanova
Can any of the company-specific risk be diversified away by investing in both J J 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 J J and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J J Snack and Kellanova, you can compare the effects of market volatilities on J J 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 J J with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of J J and Kellanova.
Diversification Opportunities for J J and Kellanova
Pay attention - limited upside
The 3 months correlation between JJSF and Kellanova is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding J J Snack and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and J J 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 J J Snack 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 J J i.e., J J and Kellanova go up and down completely randomly.
Pair Corralation between J J and Kellanova
Given the investment horizon of 90 days J J Snack is expected to under-perform the Kellanova. In addition to that, J J is 10.59 times more volatile than Kellanova. It trades about -0.39 of its total potential returns per unit of risk. Kellanova is currently generating about 0.19 per unit of volatility. If you would invest 8,154 in Kellanova on November 9, 2024 and sell it today you would earn a total of 59.00 from holding Kellanova or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J J Snack vs. Kellanova
Performance |
| Timeline |
| J J Snack |
| Kellanova |
J J and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J J and Kellanova
The main advantage of trading using opposite J J and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J J 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 J J Snack 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.| Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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