Correlation Between WK Kellogg and Albertsons Companies
Can any of the company-specific risk be diversified away by investing in both WK Kellogg and Albertsons Companies 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 WK Kellogg and Albertsons Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WK Kellogg Co and Albertsons Companies, you can compare the effects of market volatilities on WK Kellogg and Albertsons Companies 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 WK Kellogg with a short position of Albertsons Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Albertsons Companies.
Diversification Opportunities for WK Kellogg and Albertsons Companies
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KLG and Albertsons is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Albertsons Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Albertsons Companies and WK 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 WK Kellogg Co are associated (or correlated) with Albertsons Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Albertsons Companies has no effect on the direction of WK Kellogg i.e., WK Kellogg and Albertsons Companies go up and down completely randomly.
Pair Corralation between WK Kellogg and Albertsons Companies
Considering the 90-day investment horizon WK Kellogg Co is expected to generate 2.4 times more return on investment than Albertsons Companies. However, WK Kellogg is 2.4 times more volatile than Albertsons Companies. It trades about 0.06 of its potential returns per unit of risk. Albertsons Companies is currently generating about 0.0 per unit of risk. If you would invest 1,198 in WK Kellogg Co on November 3, 2024 and sell it today you would earn a total of 461.00 from holding WK Kellogg Co or generate 38.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WK Kellogg Co vs. Albertsons Companies
Performance |
| Timeline |
| WK Kellogg |
| Albertsons Companies |
WK Kellogg and Albertsons Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WK Kellogg and Albertsons Companies
The main advantage of trading using opposite WK Kellogg and Albertsons Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WK Kellogg position performs unexpectedly, Albertsons Companies 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 Albertsons Companies will offset losses from the drop in Albertsons Companies' long position.| WK Kellogg vs. PACCAR Inc | WK Kellogg vs. Universal Music Group | WK Kellogg vs. Genuine Parts Co | WK Kellogg vs. Warner Music Group |
| Albertsons Companies vs. Sprouts Farmers Market | Albertsons Companies vs. Krispy Kreme | Albertsons Companies vs. Grocery Outlet Holding | Albertsons Companies vs. Weis Markets |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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