Correlation Between Kellanova and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both Kellanova and Scepter Holdings 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 Scepter Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Scepter Holdings, you can compare the effects of market volatilities on Kellanova and Scepter Holdings 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 Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Scepter Holdings.
Diversification Opportunities for Kellanova and Scepter Holdings
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kellanova and Scepter is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings 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 Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of Kellanova i.e., Kellanova and Scepter Holdings go up and down completely randomly.
Pair Corralation between Kellanova and Scepter Holdings
Taking into account the 90-day investment horizon Kellanova is expected to generate 18.84 times less return on investment than Scepter Holdings. But when comparing it to its historical volatility, Kellanova is 13.54 times less risky than Scepter Holdings. It trades about 0.05 of its potential returns per unit of risk. Scepter Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.26 in Scepter Holdings on September 12, 2024 and sell it today you would lose (0.13) from holding Scepter Holdings or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Kellanova vs. Scepter Holdings
Performance |
| Timeline |
| Kellanova |
| Scepter Holdings |
Kellanova and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and Scepter Holdings
The main advantage of trading using opposite Kellanova and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Scepter Holdings 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' long position.| Kellanova vs. J J Snack | Kellanova vs. Central Garden Pet | Kellanova vs. Central Garden Pet | Kellanova vs. Lancaster Colony |
| Scepter Holdings vs. Qed Connect | Scepter Holdings vs. Nates Food Co | Scepter Holdings vs. Sharing Services Global | Scepter Holdings vs. Stryve 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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