Correlation Between John B and Kellanova
Can any of the company-specific risk be diversified away by investing in both John B 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 John B and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John B Sanfilippo and Kellanova, you can compare the effects of market volatilities on John B 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 John B with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of John B and Kellanova.
Diversification Opportunities for John B and Kellanova
Good diversification
The 3 months correlation between John and Kellanova is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding John B Sanfilippo and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and John B 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 John B Sanfilippo 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 John B i.e., John B and Kellanova go up and down completely randomly.
Pair Corralation between John B and Kellanova
Given the investment horizon of 90 days John B Sanfilippo is expected to generate 1.39 times more return on investment than Kellanova. However, John B is 1.39 times more volatile than Kellanova. It trades about 0.05 of its potential returns per unit of risk. Kellanova is currently generating about 0.0 per unit of risk. If you would invest 7,084 in John B Sanfilippo on January 24, 2024 and sell it today you would earn a total of 2,749 from holding John B Sanfilippo or generate 38.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
John B Sanfilippo vs. Kellanova
Performance |
Timeline |
John B Sanfilippo |
Kellanova |
John B and Kellanova Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with John B and Kellanova
The main advantage of trading using opposite John B and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John B 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.John B vs. Bunge Limited | John B vs. Archer Daniels Midland | John B vs. Fresh Del Monte | John B vs. Limoneira Co |
Kellanova vs. Bunge Limited | Kellanova vs. Archer Daniels Midland | Kellanova vs. Fresh Del Monte | Kellanova vs. Limoneira Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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