Correlation Between Village Farms and Kellanova

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

By analyzing existing cross correlation between Village Farms International and Kellanova, you can compare the effects of market volatilities on Village Farms and Kellanova 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 Village Farms with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Farms and Kellanova.

Diversification Opportunities for Village Farms and Kellanova

-0.51

Correlation Coefficient

Village Farms  Kellanova

Excellent diversification

The 3 months correlation between Village and Kellanova is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Village Farms International and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Village Farms 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 Village Farms International are associated (or correlated) with Kellanova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellanova has no effect on the direction of Village Farms i.e., Village Farms and Kellanova go up and down completely randomly.

Pair Corralation between Village Farms and Kellanova

Considering the 90-day investment horizon Village Farms International is expected to under-perform the Kellanova. In addition to that, Village Farms is 19.68 times more volatile than Kellanova. It trades about -0.07 of its total potential returns per unit of risk. Kellanova is currently generating about 0.12 per unit of volatility. If you would invest  8,003  in Kellanova on September 26, 2024 and sell it today you would earn a total of  79.00  from holding Kellanova or generate 0.99% return on investment over 90 days.

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

Village Farms International  vs.  Kellanova

Village Farms Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Village Farms International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Kellanova

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 6 (%) 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.

Pair Trading with Village Farms and Kellanova

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

The idea behind Village Farms International and Kellanova 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.