Correlation Between Kellogg and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both Kellogg and SWISS WATER 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 SWISS WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellogg Company and SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on Kellogg and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellogg and SWISS WATER.
Diversification Opportunities for Kellogg and SWISS WATER
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Kellogg and SWISS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Kellogg Company and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of Kellogg i.e., Kellogg and SWISS WATER go up and down completely randomly.
Pair Corralation between Kellogg and SWISS WATER
Assuming the 90 days horizon Kellogg is expected to generate 2.87 times less return on investment than SWISS WATER. But when comparing it to its historical volatility, Kellogg Company is 1.78 times less risky than SWISS WATER. It trades about 0.03 of its potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 171.00 in SWISS WATER DECAFFCOFFEE on September 3, 2024 and sell it today you would earn a total of 101.00 from holding SWISS WATER DECAFFCOFFEE or generate 59.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellogg Company vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| Kellogg Company |
| SWISS WATER DECAFFCOFFEE |
Kellogg and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellogg and SWISS WATER
The main advantage of trading using opposite Kellogg and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellogg position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| Kellogg vs. Reinsurance Group of | Kellogg vs. Take Two Interactive Software | Kellogg vs. PSI Software AG | Kellogg vs. LIFENET INSURANCE CO |
| SWISS WATER vs. Nestl SA | SWISS WATER vs. Kraft Heinz Co | SWISS WATER vs. General Mills | SWISS WATER 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |