Correlation Between Romana Food and WK Kellogg
Can any of the company-specific risk be diversified away by investing in both Romana Food and WK 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 Romana Food and WK Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Romana Food Brands and WK Kellogg Co, you can compare the effects of market volatilities on Romana Food and WK 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 Romana Food with a short position of WK Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Romana Food and WK Kellogg.
Diversification Opportunities for Romana Food and WK Kellogg
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Romana and KLG is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Romana Food Brands and WK Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WK Kellogg and Romana Food 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 Romana Food Brands are associated (or correlated) with WK Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WK Kellogg has no effect on the direction of Romana Food i.e., Romana Food and WK Kellogg go up and down completely randomly.
Pair Corralation between Romana Food and WK Kellogg
If you would invest 1,661 in WK Kellogg Co on November 1, 2024 and sell it today you would earn a total of 39.00 from holding WK Kellogg Co or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Romana Food Brands vs. WK Kellogg Co
Performance |
| Timeline |
| Romana Food Brands |
| WK Kellogg |
Romana Food and WK Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Romana Food and WK Kellogg
The main advantage of trading using opposite Romana Food and WK Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Romana Food position performs unexpectedly, WK 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 WK Kellogg will offset losses from the drop in WK Kellogg's long position.| Romana Food vs. Proficient Auto Logistics, | Romana Food vs. Wabash National | Romana Food vs. Ryanair Holdings PLC | Romana Food vs. Ferrari NV |
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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