Correlation Between KRISPY KREME and Nisshinbo Holdings
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and Nisshinbo Holdings 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 Nisshinbo Holdings 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 Nisshinbo Holdings, you can compare the effects of market volatilities on KRISPY KREME and Nisshinbo Holdings 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 Nisshinbo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and Nisshinbo Holdings.
Diversification Opportunities for KRISPY KREME and Nisshinbo Holdings
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between KRISPY and Nisshinbo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and Nisshinbo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshinbo Holdings 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 Nisshinbo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshinbo Holdings has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and Nisshinbo Holdings go up and down completely randomly.
Pair Corralation between KRISPY KREME and Nisshinbo Holdings
Assuming the 90 days horizon KRISPY KREME DL 01 is expected to generate 1.89 times more return on investment than Nisshinbo Holdings. However, KRISPY KREME is 1.89 times more volatile than Nisshinbo Holdings. It trades about 0.01 of its potential returns per unit of risk. Nisshinbo Holdings is currently generating about -0.03 per unit of risk. If you would invest 947.00 in KRISPY KREME DL 01 on September 20, 2024 and sell it today you would lose (32.00) from holding KRISPY KREME DL 01 or give up 3.38% 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. Nisshinbo Holdings
Performance |
| Timeline |
| KRISPY KREME DL |
| Nisshinbo Holdings |
KRISPY KREME and Nisshinbo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KRISPY KREME and Nisshinbo Holdings
The main advantage of trading using opposite KRISPY KREME and Nisshinbo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, Nisshinbo Holdings 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 Nisshinbo Holdings will offset losses from the drop in Nisshinbo Holdings' long position.| KRISPY KREME vs. Westinghouse Air Brake | KRISPY KREME vs. Pentair plc | KRISPY KREME vs. Nordic Semiconductor ASA | KRISPY KREME vs. DELTA AIR LINES |
| Nisshinbo Holdings vs. Nordic Semiconductor ASA | Nisshinbo Holdings vs. KRISPY KREME DL 01 | Nisshinbo Holdings vs. Cogent Communications Holdings | Nisshinbo Holdings vs. Chesapeake Utilities |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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