Correlation Between Kellanova and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both Kellanova and Dollar Tree 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 Dollar Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kellanova and Dollar Tree, you can compare the effects of market volatilities on Kellanova and Dollar Tree 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 Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellanova and Dollar Tree.
Diversification Opportunities for Kellanova and Dollar Tree
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kellanova and Dollar is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Kellanova and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree 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 Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of Kellanova i.e., Kellanova and Dollar Tree go up and down completely randomly.
Pair Corralation between Kellanova and Dollar Tree
Taking into account the 90-day investment horizon Kellanova is expected to generate 1.36 times more return on investment than Dollar Tree. However, Kellanova is 1.36 times more volatile than Dollar Tree. It trades about 0.18 of its potential returns per unit of risk. Dollar Tree is currently generating about -0.18 per unit of risk. If you would invest 5,798 in Kellanova on February 22, 2024 and sell it today you would earn a total of 427.00 from holding Kellanova or generate 7.36% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kellanova vs. Dollar Tree
Performance |
Timeline |
Kellanova |
Dollar Tree |
Kellanova and Dollar Tree Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kellanova and Dollar Tree
The main advantage of trading using opposite Kellanova and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kellanova position performs unexpectedly, Dollar Tree 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 Dollar Tree will offset losses from the drop in Dollar Tree's long position.Kellanova vs. Allegion PLC | Kellanova vs. Evergy Common Stock | Kellanova vs. Fortive Corp | Kellanova vs. Globe Life |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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