Correlation Between BranchOut Food and Mondelez International

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

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

Diversification Opportunities for BranchOut Food and Mondelez International

-0.38

Correlation Coefficient

BranchOut Food  Mondelez International

Very good diversification

The 3 months correlation between BranchOut and Mondelez is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BranchOut Food Common and Mondelez International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mondelez International and BranchOut Food 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 BranchOut Food Common are associated (or correlated) with Mondelez International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mondelez International has no effect on the direction of BranchOut Food i.e., BranchOut Food and Mondelez International go up and down completely randomly.

Pair Corralation between BranchOut Food and Mondelez International

Considering the 90-day investment horizon BranchOut Food Common is expected to under-perform the Mondelez International. In addition to that, BranchOut Food is 3.22 times more volatile than Mondelez International. It trades about -0.03 of its total potential returns per unit of risk. Mondelez International is currently generating about 0.17 per unit of volatility. If you would invest  5,759  in Mondelez International on January 31, 2025 and sell it today you would earn a total of  1,054  from holding Mondelez International or generate 18.3% return on investment over 90 days.

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

BranchOut Food Common  vs.  Mondelez International

BranchOut Food Common

Risk-Adjusted Performance

Very Weak

Over the last 90 days BranchOut Food Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Mondelez International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mondelez International are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Mondelez International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BranchOut Food and Mondelez International

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

The idea behind BranchOut Food Common and Mondelez International 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.