Correlation Between Kellogg and Global Ship
Can any of the company-specific risk be diversified away by investing in both Kellogg and Global Ship 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 Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellogg Company and Global Ship Lease, you can compare the effects of market volatilities on Kellogg and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellogg and Global Ship.
Diversification Opportunities for Kellogg and Global Ship
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kellogg and Global is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kellogg Company and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of Kellogg i.e., Kellogg and Global Ship go up and down completely randomly.
Pair Corralation between Kellogg and Global Ship
Assuming the 90 days horizon Kellogg Company is expected to generate 0.33 times more return on investment than Global Ship. However, Kellogg Company is 3.03 times less risky than Global Ship. It trades about 0.19 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.1 per unit of risk. If you would invest 7,184 in Kellogg Company on October 31, 2024 and sell it today you would earn a total of 634.00 from holding Kellogg Company or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellogg Company vs. Global Ship Lease
Performance |
| Timeline |
| Kellogg Company |
| Global Ship Lease |
Kellogg and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellogg and Global Ship
The main advantage of trading using opposite Kellogg and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellogg position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| Kellogg vs. MagnaChip Semiconductor Corp | Kellogg vs. Mitsubishi Materials | Kellogg vs. EAGLE MATERIALS | Kellogg vs. APPLIED MATERIALS |
| Global Ship vs. United Airlines Holdings | Global Ship vs. Micron Technology | Global Ship vs. JAPAN AIRLINES | Global Ship vs. MACOM Technology Solutions |
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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