Correlation Between Koninklijke Ahold and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Koninklijke Ahold and KRISPY KREME 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 Koninklijke Ahold and KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koninklijke Ahold Delhaize and KRISPY KREME DL 01, you can compare the effects of market volatilities on Koninklijke Ahold and KRISPY KREME 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 Koninklijke Ahold with a short position of KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koninklijke Ahold and KRISPY KREME.
Diversification Opportunities for Koninklijke Ahold and KRISPY KREME
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Koninklijke and KRISPY is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Koninklijke Ahold Delhaize and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL and Koninklijke Ahold 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 Koninklijke Ahold Delhaize are associated (or correlated) with KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of Koninklijke Ahold i.e., Koninklijke Ahold and KRISPY KREME go up and down completely randomly.
Pair Corralation between Koninklijke Ahold and KRISPY KREME
Assuming the 90 days trading horizon Koninklijke Ahold Delhaize is expected to generate 0.31 times more return on investment than KRISPY KREME. However, Koninklijke Ahold Delhaize is 3.21 times less risky than KRISPY KREME. It trades about 0.11 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.02 per unit of risk. If you would invest 2,481 in Koninklijke Ahold Delhaize on October 14, 2024 and sell it today you would earn a total of 777.00 from holding Koninklijke Ahold Delhaize or generate 31.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koninklijke Ahold Delhaize vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Koninklijke Ahold |
| KRISPY KREME DL |
Koninklijke Ahold and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koninklijke Ahold and KRISPY KREME
The main advantage of trading using opposite Koninklijke Ahold and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koninklijke Ahold position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.| Koninklijke Ahold vs. Corporate Office Properties | Koninklijke Ahold vs. Cal Maine Foods | Koninklijke Ahold vs. INVITATION HOMES DL | Koninklijke Ahold vs. Focus Home Interactive |
| KRISPY KREME vs. Insurance Australia Group | KRISPY KREME vs. REVO INSURANCE SPA | KRISPY KREME vs. Reinsurance Group of | KRISPY KREME vs. Direct Line Insurance |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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