Correlation Between Reinsurance Group and Kellogg
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and Kellogg Company, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and Kellogg.
Diversification Opportunities for Reinsurance Group and Kellogg
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Reinsurance and Kellogg is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company and Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and Kellogg go up and down completely randomly.
Pair Corralation between Reinsurance Group and Kellogg
Assuming the 90 days trading horizon Reinsurance Group is expected to generate 1.34 times less return on investment than Kellogg. In addition to that, Reinsurance Group is 1.16 times more volatile than Kellogg Company. It trades about 0.08 of its total potential returns per unit of risk. Kellogg Company is currently generating about 0.13 per unit of volatility. If you would invest 4,880 in Kellogg Company on October 25, 2024 and sell it today you would earn a total of 2,896 from holding Kellogg Company or generate 59.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. Kellogg Company
Performance |
| Timeline |
| Reinsurance Group |
| Kellogg Company |
Reinsurance Group and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and Kellogg
The main advantage of trading using opposite Reinsurance Group and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. Charter Communications | Reinsurance Group vs. Laureate Education | Reinsurance Group vs. MAVEN WIRELESS SWEDEN | Reinsurance Group vs. IDP EDUCATION LTD |
| Kellogg vs. Coffee Holding Co | Kellogg vs. Reinsurance Group of | Kellogg vs. Lery Seafood Group | Kellogg vs. Goosehead Insurance |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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