Correlation Between Kellanova and Ambev SA
Can any of the company-specific risk be diversified away by investing in both Kellanova and Ambev SA 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 Kellanova and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Ambev SA ADR, you can compare the effects of market volatilities on Kellanova and Ambev SA 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 Kellanova with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Ambev SA.
Diversification Opportunities for Kellanova and Ambev SA
Very good diversification
The 3 months correlation between Kellanova and Ambev is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Ambev SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA ADR and Kellanova 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 Kellanova are associated (or correlated) with Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA ADR has no effect on the direction of Kellanova i.e., Kellanova and Ambev SA go up and down completely randomly.
Pair Corralation between Kellanova and Ambev SA
Taking into account the 90-day investment horizon Kellanova is expected to generate 0.16 times more return on investment than Ambev SA. However, Kellanova is 6.13 times less risky than Ambev SA. It trades about 0.13 of its potential returns per unit of risk. Ambev SA ADR is currently generating about -0.12 per unit of risk. If you would invest 8,060 in Kellanova on August 27, 2024 and sell it today you would earn a total of 51.00 from holding Kellanova or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellanova vs. Ambev SA ADR
Performance |
| Timeline |
| Kellanova |
| Ambev SA ADR |
Kellanova and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and Ambev SA
The main advantage of trading using opposite Kellanova and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA's long position.| Kellanova vs. Bellring Brands LLC | Kellanova vs. Ingredion Incorporated | Kellanova vs. Nomad Foods | Kellanova vs. Simply Good Foods |
| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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