Correlation Between KRISPY KREME and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and Chesapeake Utilities 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 Chesapeake Utilities 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 Chesapeake Utilities, you can compare the effects of market volatilities on KRISPY KREME and Chesapeake Utilities 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 Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and Chesapeake Utilities.
Diversification Opportunities for KRISPY KREME and Chesapeake Utilities
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KRISPY and Chesapeake is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities 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 Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between KRISPY KREME and Chesapeake Utilities
Assuming the 90 days horizon KRISPY KREME DL 01 is expected to under-perform the Chesapeake Utilities. In addition to that, KRISPY KREME is 2.64 times more volatile than Chesapeake Utilities. It trades about -0.02 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.07 per unit of volatility. If you would invest 9,488 in Chesapeake Utilities on October 7, 2024 and sell it today you would earn a total of 2,112 from holding Chesapeake Utilities or generate 22.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KRISPY KREME DL 01 vs. Chesapeake Utilities
Performance |
| Timeline |
| KRISPY KREME DL |
| Chesapeake Utilities |
KRISPY KREME and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRISPY KREME and Chesapeake Utilities
The main advantage of trading using opposite KRISPY KREME and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, Chesapeake Utilities 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 Chesapeake Utilities will offset losses from the drop in Chesapeake Utilities' long position.| KRISPY KREME vs. Molina Healthcare | KRISPY KREME vs. Cardinal Health | KRISPY KREME vs. PURETECH HEALTH PLC | KRISPY KREME vs. PENN NATL GAMING |
| Chesapeake Utilities vs. T MOBILE US | Chesapeake Utilities vs. REVO INSURANCE SPA | Chesapeake Utilities vs. JSC Halyk bank | Chesapeake Utilities vs. Erste Group Bank |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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