Correlation Between Kraft Heinz and Kellogg
Can any of the company-specific risk be diversified away by investing in both Kraft Heinz and Kellogg 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 Kraft Heinz and Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kraft Heinz Co and Kellogg Company, you can compare the effects of market volatilities on Kraft Heinz and Kellogg 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 Kraft Heinz with a short position of Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kraft Heinz and Kellogg.
Diversification Opportunities for Kraft Heinz and Kellogg
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kraft and Kellogg is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kraft Heinz Co and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company and Kraft Heinz 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 Kraft Heinz Co are associated (or correlated) with Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg Company has no effect on the direction of Kraft Heinz i.e., Kraft Heinz and Kellogg go up and down completely randomly.
Pair Corralation between Kraft Heinz and Kellogg
Assuming the 90 days trading horizon Kraft Heinz Co is expected to under-perform the Kellogg. In addition to that, Kraft Heinz is 1.99 times more volatile than Kellogg Company. It trades about -0.06 of its total potential returns per unit of risk. Kellogg Company is currently generating about 0.2 per unit of volatility. If you would invest 7,390 in Kellogg Company on September 1, 2024 and sell it today you would earn a total of 244.00 from holding Kellogg Company or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kraft Heinz Co vs. Kellogg Company
Performance |
| Timeline |
| Kraft Heinz |
| Kellogg Company |
Kraft Heinz and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kraft Heinz and Kellogg
The main advantage of trading using opposite Kraft Heinz and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz position performs unexpectedly, Kellogg 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 Kellogg will offset losses from the drop in Kellogg's long position.| Kraft Heinz vs. Danone SA | Kraft Heinz vs. Superior Plus Corp | Kraft Heinz vs. NMI Holdings | Kraft Heinz vs. Origin Agritech |
| Kellogg vs. Strategic Education | Kellogg vs. IDP EDUCATION LTD | Kellogg vs. ACCSYS TECHPLC EO | Kellogg vs. Digilife Technologies Limited |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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