Correlation Between Kellanova and PlantFuel Life
Can any of the company-specific risk be diversified away by investing in both Kellanova and PlantFuel Life 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 PlantFuel Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and PlantFuel Life, you can compare the effects of market volatilities on Kellanova and PlantFuel Life 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 PlantFuel Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and PlantFuel Life.
Diversification Opportunities for Kellanova and PlantFuel Life
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kellanova and PlantFuel is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and PlantFuel Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PlantFuel Life 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 PlantFuel Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PlantFuel Life has no effect on the direction of Kellanova i.e., Kellanova and PlantFuel Life go up and down completely randomly.
Pair Corralation between Kellanova and PlantFuel Life
Taking into account the 90-day investment horizon Kellanova is expected to generate 21.16 times less return on investment than PlantFuel Life. But when comparing it to its historical volatility, Kellanova is 21.8 times less risky than PlantFuel Life. It trades about 0.11 of its potential returns per unit of risk. PlantFuel Life is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4.60 in PlantFuel Life on September 8, 2024 and sell it today you would lose (3.60) from holding PlantFuel Life or give up 78.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellanova vs. PlantFuel Life
Performance |
| Timeline |
| Kellanova |
| PlantFuel Life |
Kellanova and PlantFuel Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and PlantFuel Life
The main advantage of trading using opposite Kellanova and PlantFuel Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, PlantFuel Life 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 PlantFuel Life will offset losses from the drop in PlantFuel Life's long position.| Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
| PlantFuel Life vs. ConAgra Foods | PlantFuel Life vs. Campbell Soup | PlantFuel Life vs. Hormel Foods | PlantFuel Life vs. Flowers 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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