Correlation Between Kellanova and Glucose Health

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

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

Diversification Opportunities for Kellanova and Glucose Health

-0.42

Correlation Coefficient

Kellanova  Glucose Health

Very good diversification

The 3 months correlation between Kellanova and Glucose is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Glucose Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glucose Health 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 Glucose Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glucose Health has no effect on the direction of Kellanova i.e., Kellanova and Glucose Health go up and down completely randomly.

Pair Corralation between Kellanova and Glucose Health

Taking into account the 90-day investment horizon Kellanova is expected to generate 115.43 times less return on investment than Glucose Health. But when comparing it to its historical volatility, Kellanova is 90.83 times less risky than Glucose Health. It trades about 0.05 of its potential returns per unit of risk. Glucose Health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Glucose Health on September 17, 2024 and sell it today you would lose (1.00) from holding Glucose Health or give up 5.88% of portfolio value over 90 days.

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

Kellanova  vs.  Glucose Health

Kellanova

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

Glucose Health

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Glucose Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Glucose Health exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kellanova and Glucose Health

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

The idea behind Kellanova and Glucose Health 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.