Correlation Between Kellogg and ASSOC BR

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

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

Diversification Opportunities for Kellogg and ASSOC BR

-0.57

Correlation Coefficient

Kellogg  ASSOC BR

Excellent diversification

The 3 months correlation between Kellogg and ASSOC is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kellogg Company and ASSOC BR FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSOC BR FOODS and 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 Kellogg Company are associated (or correlated) with ASSOC BR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSOC BR FOODS has no effect on the direction of Kellogg i.e., Kellogg and ASSOC BR go up and down completely randomly.

Pair Corralation between Kellogg and ASSOC BR

Assuming the 90 days horizon Kellogg Company is expected to under-perform the ASSOC BR. But the stock apears to be less risky and, when comparing its historical volatility, Kellogg Company is 2.28 times less risky than ASSOC BR. The stock trades about -0.2 of its potential returns per unit of risk. The ASSOC BR FOODS is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  2,277  in ASSOC BR FOODS on March 23, 2025 and sell it today you would earn a total of  123.00  from holding ASSOC BR FOODS or generate 5.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Kellogg Company  vs.  ASSOC BR FOODS

Kellogg Company

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kellogg Company has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

ASSOC BR FOODS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASSOC BR FOODS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ASSOC BR may actually be approaching a critical reversion point that can send shares even higher in July 2025.

Pair Trading with Kellogg and ASSOC BR

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

The idea behind Kellogg Company and ASSOC BR FOODS 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.