Correlation Between Krispy Kreme and Healthier Choices
Can any of the company-specific risk be diversified away by investing in both Krispy Kreme and Healthier Choices 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 Healthier Choices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krispy Kreme and Healthier Choices Management, you can compare the effects of market volatilities on Krispy Kreme and Healthier Choices 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 Healthier Choices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krispy Kreme and Healthier Choices.
Diversification Opportunities for Krispy Kreme and Healthier Choices
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Krispy and Healthier is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Krispy Kreme and Healthier Choices Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthier Choices 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 are associated (or correlated) with Healthier Choices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthier Choices has no effect on the direction of Krispy Kreme i.e., Krispy Kreme and Healthier Choices go up and down completely randomly.
Pair Corralation between Krispy Kreme and Healthier Choices
Given the investment horizon of 90 days Krispy Kreme is expected to under-perform the Healthier Choices. But the stock apears to be less risky and, when comparing its historical volatility, Krispy Kreme is 167.84 times less risky than Healthier Choices. The stock trades about -0.27 of its potential returns per unit of risk. The Healthier Choices Management is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Healthier Choices Management on October 24, 2024 and sell it today you would earn a total of 0.00 from holding Healthier Choices Management or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krispy Kreme vs. Healthier Choices Management
Performance |
| Timeline |
| Krispy Kreme |
| Healthier Choices |
Krispy Kreme and Healthier Choices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krispy Kreme and Healthier Choices
The main advantage of trading using opposite Krispy Kreme and Healthier Choices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krispy Kreme position performs unexpectedly, Healthier Choices 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 Healthier Choices will offset losses from the drop in Healthier Choices' long position.| Krispy Kreme vs. Natural Grocers by | Krispy Kreme vs. Sprouts Farmers Market | Krispy Kreme vs. Albertsons Companies | Krispy Kreme vs. Ingles Markets Incorporated |
| Healthier Choices vs. Albertsons Companies | Healthier Choices vs. Sprouts Farmers Market | Healthier Choices vs. Krispy Kreme | Healthier Choices vs. Grocery Outlet Holding |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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