Correlation Between Kellanova and WH Group
Can any of the company-specific risk be diversified away by investing in both Kellanova and WH Group 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 Kellanova and WH Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and WH Group Ltd, you can compare the effects of market volatilities on Kellanova and WH Group 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 Kellanova with a short position of WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and WH Group.
Diversification Opportunities for Kellanova and WH Group
Poor diversification
The 3 months correlation between Kellanova and WHGLY is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and WH Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group and Kellanova 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 Kellanova are associated (or correlated) with WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group has no effect on the direction of Kellanova i.e., Kellanova and WH Group go up and down completely randomly.
Pair Corralation between Kellanova and WH Group
Taking into account the 90-day investment horizon Kellanova is expected to generate 9.96 times less return on investment than WH Group. But when comparing it to its historical volatility, Kellanova is 2.2 times less risky than WH Group. It trades about 0.06 of its potential returns per unit of risk. WH Group Ltd is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,319 in WH Group Ltd on January 30, 2024 and sell it today you would earn a total of 170.00 from holding WH Group Ltd or generate 12.89% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kellanova vs. WH Group Ltd
Performance |
Timeline |
Kellanova |
WH Group |
Kellanova and WH Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kellanova and WH Group
The main advantage of trading using opposite Kellanova and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, WH Group 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 WH Group will offset losses from the drop in WH Group's long position.Kellanova vs. Golden Agri Resources | Kellanova vs. Vital FarmsInc | Kellanova vs. Local Bounti Corp | Kellanova vs. Fresh Del Monte |
WH Group vs. Kellanova | WH Group vs. Lancaster Colony | WH Group vs. The A2 Milk | WH Group vs. Artisan Consumer Goods |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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