Correlation Between AIR PRODCHEMICALS and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and KRISPY KREME DL 01, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and KRISPY KREME.
Diversification Opportunities for AIR PRODCHEMICALS and KRISPY KREME
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AIR and KRISPY is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and KRISPY KREME go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and KRISPY KREME
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to generate 0.58 times more return on investment than KRISPY KREME. However, AIR PRODCHEMICALS is 1.73 times less risky than KRISPY KREME. It trades about 0.02 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.01 per unit of risk. If you would invest 28,781 in AIR PRODCHEMICALS on September 3, 2024 and sell it today you would earn a total of 2,849 from holding AIR PRODCHEMICALS or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. KRISPY KREME DL 01
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| KRISPY KREME DL |
AIR PRODCHEMICALS and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and KRISPY KREME
The main advantage of trading using opposite AIR PRODCHEMICALS and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. Tsingtao Brewery | AIR PRODCHEMICALS vs. Broadwind | AIR PRODCHEMICALS vs. National Beverage Corp | AIR PRODCHEMICALS vs. United Breweries Co |
| KRISPY KREME vs. LIFENET INSURANCE CO | KRISPY KREME vs. CPU SOFTWAREHOUSE | KRISPY KREME vs. UNIVMUSIC GRPADR050 | KRISPY KREME vs. UPDATE SOFTWARE |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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