Correlation Between KELLOGG Dusseldorf and ZENERGY B

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

By analyzing existing cross correlation between KELLOGG Dusseldorf and ZENERGY B AB, you can compare the effects of market volatilities on KELLOGG Dusseldorf and ZENERGY B 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 KELLOGG Dusseldorf with a short position of ZENERGY B. Check out your portfolio center. Please also check ongoing floating volatility patterns of KELLOGG Dusseldorf and ZENERGY B.

Diversification Opportunities for KELLOGG Dusseldorf and ZENERGY B

-0.55

Correlation Coefficient

KELLOGG Dusseldorf  ZENERGY B

Excellent diversification

The 3 months correlation between KELLOGG and ZENERGY is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding KELLOGG Dusseldorf and ZENERGY B AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZENERGY B AB and KELLOGG Dusseldorf 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 KELLOGG Dusseldorf are associated (or correlated) with ZENERGY B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZENERGY B AB has no effect on the direction of KELLOGG Dusseldorf i.e., KELLOGG Dusseldorf and ZENERGY B go up and down completely randomly.

Pair Corralation between KELLOGG Dusseldorf and ZENERGY B

Assuming the 90 days trading horizon KELLOGG Dusseldorf is expected to generate 0.08 times more return on investment than ZENERGY B. However, KELLOGG Dusseldorf is 12.96 times less risky than ZENERGY B. It trades about 0.07 of its potential returns per unit of risk. ZENERGY B AB is currently generating about -0.32 per unit of risk. If you would invest  7,657  in KELLOGG Dusseldorf on September 22, 2024 and sell it today you would earn a total of  55.00  from holding KELLOGG Dusseldorf or generate 0.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

KELLOGG Dusseldorf  vs.  ZENERGY B AB

KELLOGG Dusseldorf

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in KELLOGG Dusseldorf are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, KELLOGG Dusseldorf may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ZENERGY B AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZENERGY B AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with KELLOGG Dusseldorf and ZENERGY B

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

The idea behind KELLOGG Dusseldorf and ZENERGY B AB 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.