Correlation Between WK Kellogg and Trend Micro
Can any of the company-specific risk be diversified away by investing in both WK Kellogg and Trend Micro 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 Trend Micro 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 Trend Micro, you can compare the effects of market volatilities on WK Kellogg and Trend Micro 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 Trend Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Trend Micro.
Diversification Opportunities for WK Kellogg and Trend Micro
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between KLG and Trend is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Trend Micro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trend Micro 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 Trend Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trend Micro has no effect on the direction of WK Kellogg i.e., WK Kellogg and Trend Micro go up and down completely randomly.
Pair Corralation between WK Kellogg and Trend Micro
Considering the 90-day investment horizon WK Kellogg is expected to generate 1.06 times less return on investment than Trend Micro. In addition to that, WK Kellogg is 1.19 times more volatile than Trend Micro. It trades about 0.02 of its total potential returns per unit of risk. Trend Micro is currently generating about 0.02 per unit of volatility. If you would invest 4,864 in Trend Micro on October 25, 2024 and sell it today you would earn a total of 896.00 from holding Trend Micro or generate 18.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.14% |
| Values | Daily Returns |
WK Kellogg Co vs. Trend Micro
Performance |
| Timeline |
| WK Kellogg |
| Trend Micro |
WK Kellogg and Trend Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WK Kellogg and Trend Micro
The main advantage of trading using opposite WK Kellogg and Trend Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WK Kellogg position performs unexpectedly, Trend Micro 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 Trend Micro will offset losses from the drop in Trend Micro's long position.| WK Kellogg vs. Academy Sports Outdoors | WK Kellogg vs. Proficient Auto Logistics, | WK Kellogg vs. Life Time Group | WK Kellogg vs. flyExclusive, |
| Trend Micro vs. Perseus Mining Limited | Trend Micro vs. Aluminum of | Trend Micro vs. Copperbank Resources Corp | Trend Micro vs. TFI International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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