Correlation Between JM Smucker and Kellanova
Can any of the company-specific risk be diversified away by investing in both JM Smucker 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 JM Smucker and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JM Smucker and Kellanova, you can compare the effects of market volatilities on JM Smucker 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 JM Smucker with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of JM Smucker and Kellanova.
Diversification Opportunities for JM Smucker and Kellanova
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SJM and Kellanova is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding JM Smucker and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and JM Smucker 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 JM Smucker 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 JM Smucker i.e., JM Smucker and Kellanova go up and down completely randomly.
Pair Corralation between JM Smucker and Kellanova
Considering the 90-day investment horizon JM Smucker is expected to under-perform the Kellanova. In addition to that, JM Smucker is 1.01 times more volatile than Kellanova. It trades about -0.03 of its total potential returns per unit of risk. Kellanova is currently generating about 0.06 per unit of volatility. If you would invest 5,665 in Kellanova on November 1, 2024 and sell it today you would earn a total of 2,529 from holding Kellanova or generate 44.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JM Smucker vs. Kellanova
Performance |
| Timeline |
| JM Smucker |
| Kellanova |
JM Smucker and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JM Smucker and Kellanova
The main advantage of trading using opposite JM Smucker and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JM Smucker 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.| JM Smucker vs. ConAgra Foods | JM Smucker vs. Kellanova | JM Smucker vs. General Mills | JM Smucker vs. Hormel Foods |
| 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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