Correlation Between WK Kellogg and The Hartford

Can any of the company-specific risk be diversified away by investing in both WK Kellogg and The Hartford 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 The Hartford 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 The Hartford Growth, you can compare the effects of market volatilities on WK Kellogg and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of WK Kellogg and The Hartford.

Diversification Opportunities for WK Kellogg and The Hartford

-0.56

Correlation Coefficient

WK Kellogg  The Hartford

Excellent diversification

The 3 months correlation between KLG and The is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding WK Kellogg Co and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of WK Kellogg i.e., WK Kellogg and The Hartford go up and down completely randomly.

Pair Corralation between WK Kellogg and The Hartford

Considering the 90-day investment horizon WK Kellogg Co is expected to under-perform the The Hartford. In addition to that, WK Kellogg is 1.64 times more volatile than The Hartford Growth. It trades about -0.59 of its total potential returns per unit of risk. The Hartford Growth is currently generating about 0.4 per unit of volatility. If you would invest  5,501  in The Hartford Growth on March 17, 2024 and sell it today you would earn a total of  424.00  from holding The Hartford Growth or generate 7.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

WK Kellogg Co  vs.  The Hartford Growth

WK Kellogg

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WK Kellogg Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak essential indicators, WK Kellogg may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Hartford Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Hartford Growth are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, The Hartford may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with WK Kellogg and The Hartford

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

The idea behind WK Kellogg Co and The Hartford Growth 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.