Correlation Between Kerry Group and Kellanova
Can any of the company-specific risk be diversified away by investing in both Kerry Group 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 Kerry Group and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kerry Group plc and Kellanova, you can compare the effects of market volatilities on Kerry Group 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 Kerry Group with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerry Group and Kellanova.
Diversification Opportunities for Kerry Group and Kellanova
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kerry and Kellanova is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kerry Group plc and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Kerry 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 Kerry Group plc 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 Kerry Group i.e., Kerry Group and Kellanova go up and down completely randomly.
Pair Corralation between Kerry Group and Kellanova
Assuming the 90 days horizon Kerry Group plc is expected to generate 1.69 times more return on investment than Kellanova. However, Kerry Group is 1.69 times more volatile than Kellanova. It trades about 0.0 of its potential returns per unit of risk. Kellanova is currently generating about -0.01 per unit of risk. If you would invest 9,914 in Kerry Group plc on January 26, 2024 and sell it today you would lose (1,093) from holding Kerry Group plc or give up 11.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.04% |
| Values | Daily Returns |
Kerry Group plc vs. Kellanova
Performance |
| Timeline |
| Kerry Group plc |
| Kellanova |
Kerry Group and Kellanova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kerry Group and Kellanova
The main advantage of trading using opposite Kerry Group and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kerry Group 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.| Kerry Group vs. Kellanova | Kerry Group vs. Lancaster Colony | Kerry Group vs. The A2 Milk | Kerry Group vs. Artisan Consumer Goods |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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