Correlation Between Home Depot and Kellanova

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Home Depot 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 Home Depot and Kellanova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Depot and Kellanova, you can compare the effects of market volatilities on Home Depot 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 Home Depot with a short position of Kellanova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Depot and Kellanova.

Diversification Opportunities for Home Depot and Kellanova

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Home and Kellanova is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Home Depot and Kellanova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellanova and Home Depot 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 Home Depot 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 Home Depot i.e., Home Depot and Kellanova go up and down completely randomly.

Pair Corralation between Home Depot and Kellanova

Allowing for the 90-day total investment horizon Home Depot is expected to under-perform the Kellanova. In addition to that, Home Depot is 1.24 times more volatile than Kellanova. It trades about -0.14 of its total potential returns per unit of risk. Kellanova is currently generating about 0.02 per unit of volatility. If you would invest  5,613  in Kellanova on January 20, 2024 and sell it today you would earn a total of  41.00  from holding Kellanova or generate 0.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

Home Depot  vs.  Kellanova

 Performance 
       Timeline  
Home Depot 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Home Depot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Home Depot is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
Kellanova 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Kellanova are ranked lower than 5 (%) 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 recent stock price mess, may contribute to short-term losses for the institutional investors.

Home Depot and Kellanova Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Home Depot and Kellanova

The main advantage of trading using opposite Home Depot and Kellanova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Depot 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 Home Depot 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.
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

Other Complementary Tools

Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Equity Valuation
Check real value of public entities based on technical and fundamental data
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Economic Indicators
Top statistical indicators that provide insights into how an economy is performing
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
AI Investment Finder
Use AI to screen and filter profitable investment opportunities
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges