Correlation Between Kellogg and COFCO Joycome
Can any of the company-specific risk be diversified away by investing in both Kellogg and COFCO Joycome 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 Kellogg and COFCO Joycome into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellogg Company and COFCO Joycome Foods, you can compare the effects of market volatilities on Kellogg and COFCO Joycome 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 Kellogg with a short position of COFCO Joycome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellogg and COFCO Joycome.
Diversification Opportunities for Kellogg and COFCO Joycome
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kellogg and COFCO is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kellogg Company and COFCO Joycome Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COFCO Joycome Foods and Kellogg 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 Kellogg Company are associated (or correlated) with COFCO Joycome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COFCO Joycome Foods has no effect on the direction of Kellogg i.e., Kellogg and COFCO Joycome go up and down completely randomly.
Pair Corralation between Kellogg and COFCO Joycome
Assuming the 90 days horizon Kellogg Company is expected to generate 0.41 times more return on investment than COFCO Joycome. However, Kellogg Company is 2.41 times less risky than COFCO Joycome. It trades about 0.04 of its potential returns per unit of risk. COFCO Joycome Foods is currently generating about -0.24 per unit of risk. If you would invest 7,750 in Kellogg Company on October 25, 2024 and sell it today you would earn a total of 26.00 from holding Kellogg Company or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellogg Company vs. COFCO Joycome Foods
Performance |
| Timeline |
| Kellogg Company |
| COFCO Joycome Foods |
Kellogg and COFCO Joycome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellogg and COFCO Joycome
The main advantage of trading using opposite Kellogg and COFCO Joycome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellogg position performs unexpectedly, COFCO Joycome 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 COFCO Joycome will offset losses from the drop in COFCO Joycome's long position.| Kellogg vs. Coffee Holding Co | Kellogg vs. Reinsurance Group of | Kellogg vs. Lery Seafood Group | Kellogg vs. Goosehead Insurance |
| COFCO Joycome vs. General Mills | COFCO Joycome vs. Danone SA | COFCO Joycome vs. Hormel Foods | COFCO Joycome vs. Kellogg Company |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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