Correlation Between KELLOGG Dusseldorf and Kingspan Group

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

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

Diversification Opportunities for KELLOGG Dusseldorf and Kingspan Group

0.0

Correlation Coefficient

KELLOGG Dusseldorf  Kingspan Group

Pay attention - limited upside

The 3 months correlation between KELLOGG and Kingspan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KELLOGG Dusseldorf and Kingspan Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingspan Group plc 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 Kingspan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingspan Group plc has no effect on the direction of KELLOGG Dusseldorf i.e., KELLOGG Dusseldorf and Kingspan Group go up and down completely randomly.

Pair Corralation between KELLOGG Dusseldorf and Kingspan Group

If you would invest  0.00  in KELLOGG Dusseldorf on October 1, 2024 and sell it today you would earn a total of  0.00  from holding KELLOGG Dusseldorf or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

KELLOGG Dusseldorf  vs.  Kingspan Group plc

KELLOGG Dusseldorf

Risk-Adjusted Performance

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Solid

Over the last 90 days KELLOGG Dusseldorf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, KELLOGG Dusseldorf is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Kingspan Group plc

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Kingspan Group plc 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 Kingspan Group

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

The idea behind KELLOGG Dusseldorf and Kingspan Group plc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.