Correlation Between Auburn National and Krispy Kreme
Can any of the company-specific risk be diversified away by investing in both Auburn National 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 Auburn National and Krispy Kreme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and Krispy Kreme, you can compare the effects of market volatilities on Auburn National 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 Auburn National with a short position of Krispy Kreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Krispy Kreme.
Diversification Opportunities for Auburn National and Krispy Kreme
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Auburn and Krispy is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Krispy Kreme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krispy Kreme and Auburn National 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 Auburn National Bancorporation 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 has no effect on the direction of Auburn National i.e., Auburn National and Krispy Kreme go up and down completely randomly.
Pair Corralation between Auburn National and Krispy Kreme
Given the investment horizon of 90 days Auburn National Bancorporation is expected to generate 0.78 times more return on investment than Krispy Kreme. However, Auburn National Bancorporation is 1.27 times less risky than Krispy Kreme. It trades about 0.02 of its potential returns per unit of risk. Krispy Kreme is currently generating about 0.01 per unit of risk. If you would invest 2,141 in Auburn National Bancorporation on September 14, 2024 and sell it today you would earn a total of 159.00 from holding Auburn National Bancorporation or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.18% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Krispy Kreme
Performance |
| Timeline |
| Auburn National Banc |
| Krispy Kreme |
Auburn National and Krispy Kreme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Krispy Kreme
The main advantage of trading using opposite Auburn National and Krispy Kreme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National 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.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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