Correlation Between Kellanova and Orkla ASA
Can any of the company-specific risk be diversified away by investing in both Kellanova and Orkla ASA 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 Orkla ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Orkla ASA ADR, you can compare the effects of market volatilities on Kellanova and Orkla ASA 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 Orkla ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Orkla ASA.
Diversification Opportunities for Kellanova and Orkla ASA
Average diversification
The 3 months correlation between Kellanova and Orkla is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Orkla ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orkla ASA 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 Orkla ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orkla ASA ADR has no effect on the direction of Kellanova i.e., Kellanova and Orkla ASA go up and down completely randomly.
Pair Corralation between Kellanova and Orkla ASA
Taking into account the 90-day investment horizon Kellanova is expected to generate 1.28 times less return on investment than Orkla ASA. But when comparing it to its historical volatility, Kellanova is 1.11 times less risky than Orkla ASA. It trades about 0.05 of its potential returns per unit of risk. Orkla ASA ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 631.00 in Orkla ASA ADR on September 5, 2024 and sell it today you would earn a total of 303.00 from holding Orkla ASA ADR or generate 48.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellanova vs. Orkla ASA ADR
Performance |
| Timeline |
| Kellanova |
| Orkla ASA ADR |
Kellanova and Orkla ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and Orkla ASA
The main advantage of trading using opposite Kellanova and Orkla ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Orkla ASA 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 Orkla ASA will offset losses from the drop in Orkla ASA's long position.| Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. McCormick Company Incorporated | Kellanova vs. Lamb Weston Holdings |
| Orkla ASA vs. Kellanova | Orkla ASA vs. Lancaster Colony | Orkla ASA vs. The A2 Milk | Orkla ASA vs. Artisan Consumer Goods |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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