Correlation Between Kellanova and Real Good
Can any of the company-specific risk be diversified away by investing in both Kellanova and Real Good 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 Real Good into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Real Good Food, you can compare the effects of market volatilities on Kellanova and Real Good 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 Real Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Real Good.
Diversification Opportunities for Kellanova and Real Good
Modest diversification
The 3 months correlation between Kellanova and Real is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Real Good Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Good Food 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 Real Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Good Food has no effect on the direction of Kellanova i.e., Kellanova and Real Good go up and down completely randomly.
Pair Corralation between Kellanova and Real Good
Taking into account the 90-day investment horizon Kellanova is expected to generate 2.92 times less return on investment than Real Good. But when comparing it to its historical volatility, Kellanova is 19.42 times less risky than Real Good. It trades about 0.05 of its potential returns per unit of risk. Real Good Food is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5,160 in Real Good Food on November 9, 2024 and sell it today you would lose (5,146) from holding Real Good Food or give up 99.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.96% |
| Values | Daily Returns |
Kellanova vs. Real Good Food
Performance |
| Timeline |
| Kellanova |
| Real Good Food |
Risk-Adjusted Performance
Modest
Weak | Strong |
Kellanova and Real Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellanova and Real Good
The main advantage of trading using opposite Kellanova and Real Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Real Good 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 Real Good will offset losses from the drop in Real Good's long position.| Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
| Real Good vs. Seneca Foods Corp | Real Good vs. Central Garden Pet | Real Good vs. Central Garden Pet | Real Good vs. Natures Sunshine Products |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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