Correlation Between Kellogg and Chunghwa Telecom
Can any of the company-specific risk be diversified away by investing in both Kellogg and Chunghwa Telecom 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 Chunghwa Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellogg Company and Chunghwa Telecom Co, you can compare the effects of market volatilities on Kellogg and Chunghwa Telecom 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 Chunghwa Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellogg and Chunghwa Telecom.
Diversification Opportunities for Kellogg and Chunghwa Telecom
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kellogg and Chunghwa is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kellogg Company and Chunghwa Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Telecom 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 Chunghwa Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Telecom has no effect on the direction of Kellogg i.e., Kellogg and Chunghwa Telecom go up and down completely randomly.
Pair Corralation between Kellogg and Chunghwa Telecom
Assuming the 90 days horizon Kellogg Company is expected to generate 0.74 times more return on investment than Chunghwa Telecom. However, Kellogg Company is 1.34 times less risky than Chunghwa Telecom. It trades about 0.23 of its potential returns per unit of risk. Chunghwa Telecom Co is currently generating about -0.05 per unit of risk. If you would invest 7,716 in Kellogg Company on October 20, 2024 and sell it today you would earn a total of 150.00 from holding Kellogg Company or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kellogg Company vs. Chunghwa Telecom Co
Performance |
| Timeline |
| Kellogg Company |
| Chunghwa Telecom |
Kellogg and Chunghwa Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kellogg and Chunghwa Telecom
The main advantage of trading using opposite Kellogg and Chunghwa Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellogg position performs unexpectedly, Chunghwa Telecom 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 Chunghwa Telecom will offset losses from the drop in Chunghwa Telecom's long position.| Kellogg vs. Elmos Semiconductor SE | Kellogg vs. Ribbon Communications | Kellogg vs. TOREX SEMICONDUCTOR LTD | Kellogg vs. TELECOM ITALIA |
| Chunghwa Telecom vs. Salesforce | Chunghwa Telecom vs. Gruppo Mutuionline SpA | Chunghwa Telecom vs. SENECA FOODS A | Chunghwa Telecom vs. Performance Food Group |
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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