Correlation Between KRISPY KREME and Alfa Financial
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and Alfa Financial 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 KRISPY KREME and Alfa Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KRISPY KREME DL 01 and Alfa Financial Software, you can compare the effects of market volatilities on KRISPY KREME and Alfa Financial 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 KRISPY KREME with a short position of Alfa Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and Alfa Financial.
Diversification Opportunities for KRISPY KREME and Alfa Financial
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KRISPY and Alfa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software and KRISPY KREME 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 KRISPY KREME DL 01 are associated (or correlated) with Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and Alfa Financial go up and down completely randomly.
Pair Corralation between KRISPY KREME and Alfa Financial
Assuming the 90 days horizon KRISPY KREME DL 01 is expected to under-perform the Alfa Financial. In addition to that, KRISPY KREME is 1.74 times more volatile than Alfa Financial Software. It trades about 0.0 of its total potential returns per unit of risk. Alfa Financial Software is currently generating about 0.11 per unit of volatility. If you would invest 160.00 in Alfa Financial Software on September 4, 2024 and sell it today you would earn a total of 98.00 from holding Alfa Financial Software or generate 61.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KRISPY KREME DL 01 vs. Alfa Financial Software
Performance |
| Timeline |
| KRISPY KREME DL |
| Alfa Financial Software |
KRISPY KREME and Alfa Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRISPY KREME and Alfa Financial
The main advantage of trading using opposite KRISPY KREME and Alfa Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, Alfa Financial 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 Alfa Financial will offset losses from the drop in Alfa Financial's long position.| KRISPY KREME vs. LIFENET INSURANCE CO | KRISPY KREME vs. CPU SOFTWAREHOUSE | KRISPY KREME vs. UNIVMUSIC GRPADR050 | KRISPY KREME vs. UPDATE SOFTWARE |
| Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc | Alfa Financial vs. Apple Inc |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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