Correlation Between Lancaster Colony and Kellanova
Can any of the company-specific risk be diversified away by investing in both Lancaster Colony and Kellanova 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 Lancaster Colony and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lancaster Colony and Kellanova, you can compare the effects of market volatilities on Lancaster Colony and Kellanova 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 Lancaster Colony with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lancaster Colony and Kellanova.
Diversification Opportunities for Lancaster Colony and Kellanova
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lancaster and Kellanova is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lancaster Colony and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Lancaster Colony 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 Lancaster Colony are associated (or correlated) with Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of Lancaster Colony i.e., Lancaster Colony and Kellanova go up and down completely randomly.
Pair Corralation between Lancaster Colony and Kellanova
Given the investment horizon of 90 days Lancaster Colony is expected to generate 12.02 times more return on investment than Kellanova. However, Lancaster Colony is 12.02 times more volatile than Kellanova. It trades about 0.22 of its potential returns per unit of risk. Kellanova is currently generating about 0.19 per unit of risk. If you would invest 16,970 in Lancaster Colony on November 9, 2024 and sell it today you would earn a total of 1,787 from holding Lancaster Colony or generate 10.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lancaster Colony vs. Kellanova
Performance |
| Timeline |
| Lancaster Colony |
| Kellanova |
Lancaster Colony and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lancaster Colony and Kellanova
The main advantage of trading using opposite Lancaster Colony and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lancaster Colony position performs unexpectedly, Kellanova 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 Kellanova will offset losses from the drop in Kellanova's long position.| Lancaster Colony vs. Treehouse Foods | Lancaster Colony vs. John B Sanfilippo | Lancaster Colony vs. Seneca Foods Corp | Lancaster Colony vs. J J Snack |
| Kellanova vs. Campbell Soup | Kellanova vs. ConAgra Foods | Kellanova vs. Hormel Foods | Kellanova vs. Kraft Heinz Co |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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