Correlation Between Kellanova and Trxade

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

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

Diversification Opportunities for Kellanova and Trxade

-0.69

Correlation Coefficient

Kellanova  Trxade

Excellent diversification

The 3 months correlation between Kellanova and Trxade is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Trxade Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trxade Group and Kellanova 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 Kellanova are associated (or correlated) with Trxade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trxade Group has no effect on the direction of Kellanova i.e., Kellanova and Trxade go up and down completely randomly.

Pair Corralation between Kellanova and Trxade

Taking into account the 90-day investment horizon Kellanova is expected to generate 0.16 times more return on investment than Trxade. However, Kellanova is 6.09 times less risky than Trxade. It trades about 0.07 of its potential returns per unit of risk. Trxade Group is currently generating about -0.03 per unit of risk. If you would invest  5,559  in Kellanova on March 21, 2024 and sell it today you would earn a total of  321.00  from holding Kellanova or generate 5.77% return on investment over 90 days.

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

Kellanova  vs.  Trxade Group

Kellanova

Risk-Adjusted Performance

5 of 100

Modest

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Trxade Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trxade Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kellanova and Trxade

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

The idea behind Kellanova and Trxade Group 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.