Correlation Between KRISPY KREME and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on KRISPY KREME and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and FEMALE HEALTH.
Diversification Opportunities for KRISPY KREME and FEMALE HEALTH
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between KRISPY and FEMALE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between KRISPY KREME and FEMALE HEALTH
Assuming the 90 days horizon KRISPY KREME DL 01 is expected to generate 0.8 times more return on investment than FEMALE HEALTH. However, KRISPY KREME DL 01 is 1.24 times less risky than FEMALE HEALTH. It trades about 0.0 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.04 per unit of risk. If you would invest 1,060 in KRISPY KREME DL 01 on August 31, 2024 and sell it today you would lose (10.00) from holding KRISPY KREME DL 01 or give up 0.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KRISPY KREME DL 01 vs. FEMALE HEALTH
Performance |
| Timeline |
| KRISPY KREME DL |
| FEMALE HEALTH |
KRISPY KREME and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRISPY KREME and FEMALE HEALTH
The main advantage of trading using opposite KRISPY KREME and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| KRISPY KREME vs. Highlight Communications AG | KRISPY KREME vs. Playtech plc | KRISPY KREME vs. PLAYSTUDIOS A DL 0001 | KRISPY KREME vs. LG Display Co |
| FEMALE HEALTH vs. Nok Airlines PCL | FEMALE HEALTH vs. Seven West Media | FEMALE HEALTH vs. PARKEN Sport Entertainment | FEMALE HEALTH vs. SINGAPORE AIRLINES |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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