Correlation Between Kellanova and John B
Can any of the company-specific risk be diversified away by investing in both Kellanova and John B 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 John B into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and John B Sanfilippo, you can compare the effects of market volatilities on Kellanova and John B 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 John B. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and John B.
Diversification Opportunities for Kellanova and John B
Very good diversification
The 3 months correlation between Kellanova and John is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and John B Sanfilippo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John B Sanfilippo 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 John B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John B Sanfilippo has no effect on the direction of Kellanova i.e., Kellanova and John B go up and down completely randomly.
Pair Corralation between Kellanova and John B
Taking into account the 90-day investment horizon Kellanova is expected to generate 0.08 times more return on investment than John B. However, Kellanova is 12.5 times less risky than John B. It trades about 0.08 of its potential returns per unit of risk. John B Sanfilippo is currently generating about -0.12 per unit of risk. If you would invest 8,085 in Kellanova on August 31, 2024 and sell it today you would earn a total of 30.00 from holding Kellanova or generate 0.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellanova vs. John B Sanfilippo
Performance |
| Timeline |
| Kellanova |
| John B Sanfilippo |
Kellanova and John B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and John B
The main advantage of trading using opposite Kellanova and John B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, John B 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 John B will offset losses from the drop in John B's long position.| Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
| John B vs. Lancaster Colony | John B vs. Treehouse Foods | John B vs. Seneca Foods Corp | John B vs. Seneca Foods Corp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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