Correlation Between Kellanova and US Foods

Can any of the company-specific risk be diversified away by investing in both Kellanova and US Foods 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 US Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kellanova and US Foods Holding, you can compare the effects of market volatilities on Kellanova and US Foods 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 US Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and US Foods.

Diversification Opportunities for Kellanova and US Foods

-0.52

Correlation Coefficient

Kellanova  US Foods

Excellent diversification

The 3 months correlation between Kellanova and USFD is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and US Foods Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Foods Holding 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 US Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Foods Holding has no effect on the direction of Kellanova i.e., Kellanova and US Foods go up and down completely randomly.

Pair Corralation between Kellanova and US Foods

Taking into account the 90-day investment horizon Kellanova is expected to under-perform the US Foods. But the stock apears to be less risky and, when comparing its historical volatility, Kellanova is 2.72 times less risky than US Foods. The stock trades about -0.09 of its potential returns per unit of risk. The US Foods Holding is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  6,844  in US Foods Holding on May 3, 2025 and sell it today you would earn a total of  1,464  from holding US Foods Holding or generate 21.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kellanova  vs.  US Foods Holding

Kellanova

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kellanova has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Kellanova is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

US Foods Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in US Foods Holding are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, US Foods exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kellanova and US Foods

The main advantage of trading using opposite Kellanova and US Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, US Foods 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 US Foods will offset losses from the drop in US Foods' long position.

The idea behind Kellanova and US Foods Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.