Correlation Between Kellanova and Better Choice
Can any of the company-specific risk be diversified away by investing in both Kellanova and Better Choice 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 Better Choice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Better Choice, you can compare the effects of market volatilities on Kellanova and Better Choice 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 Better Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Better Choice.
Diversification Opportunities for Kellanova and Better Choice
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kellanova and Better is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Better Choice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Choice 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 Better Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Choice has no effect on the direction of Kellanova i.e., Kellanova and Better Choice go up and down completely randomly.
Pair Corralation between Kellanova and Better Choice
Taking into account the 90-day investment horizon Kellanova is expected to generate 18.62 times less return on investment than Better Choice. But when comparing it to its historical volatility, Kellanova is 23.01 times less risky than Better Choice. It trades about 0.13 of its potential returns per unit of risk. Better Choice is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Better Choice on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Better Choice or generate 9.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellanova vs. Better Choice
Performance |
| Timeline |
| Kellanova |
| Better Choice |
Kellanova and Better Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and Better Choice
The main advantage of trading using opposite Kellanova and Better Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Better Choice 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 Better Choice will offset losses from the drop in Better Choice's long position.| Kellanova vs. Bellring Brands LLC | Kellanova vs. Ingredion Incorporated | Kellanova vs. Nomad Foods | Kellanova vs. Simply Good Foods |
| Better Choice vs. Blue Star Foods | Better Choice vs. Stryve Foods | Better Choice vs. BioAdaptives | Better Choice vs. Beyond Oil |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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