Correlation Between WK Kellogg and Svenska Cellulosa
Can any of the company-specific risk be diversified away by investing in both WK Kellogg and Svenska Cellulosa 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 WK Kellogg and Svenska Cellulosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WK Kellogg Co and Svenska Cellulosa Aktiebolaget, you can compare the effects of market volatilities on WK Kellogg and Svenska Cellulosa 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 WK Kellogg with a short position of Svenska Cellulosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and Svenska Cellulosa.
Diversification Opportunities for WK Kellogg and Svenska Cellulosa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KLG and Svenska is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and Svenska Cellulosa Aktiebolaget in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svenska Cellulosa and WK Kellogg 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 WK Kellogg Co are associated (or correlated) with Svenska Cellulosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svenska Cellulosa has no effect on the direction of WK Kellogg i.e., WK Kellogg and Svenska Cellulosa go up and down completely randomly.
Pair Corralation between WK Kellogg and Svenska Cellulosa
If you would invest 1,658 in WK Kellogg Co on February 24, 2024 and sell it today you would earn a total of 343.00 from holding WK Kellogg Co or generate 20.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
WK Kellogg Co vs. Svenska Cellulosa Aktiebolaget
Performance |
Timeline |
WK Kellogg |
Svenska Cellulosa |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
WK Kellogg and Svenska Cellulosa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WK Kellogg and Svenska Cellulosa
The main advantage of trading using opposite WK Kellogg and Svenska Cellulosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WK Kellogg position performs unexpectedly, Svenska Cellulosa 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 Svenska Cellulosa will offset losses from the drop in Svenska Cellulosa's long position.WK Kellogg vs. J J Snack | WK Kellogg vs. Central Garden Pet | WK Kellogg vs. Central Garden Pet | WK Kellogg vs. McCormick Company Incorporated |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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