Correlation Between FEMALE HEALTH and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and KRISPY KREME DL 01, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and KRISPY KREME.
Diversification Opportunities for FEMALE HEALTH and KRISPY KREME
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between FEMALE and KRISPY is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and KRISPY KREME go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and KRISPY KREME
Assuming the 90 days trading horizon FEMALE HEALTH is expected to under-perform the KRISPY KREME. In addition to that, FEMALE HEALTH is 1.15 times more volatile than KRISPY KREME DL 01. It trades about -0.18 of its total potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.01 per unit of volatility. If you would invest 1,070 in KRISPY KREME DL 01 on August 27, 2024 and sell it today you would lose (20.00) from holding KRISPY KREME DL 01 or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. KRISPY KREME DL 01
Performance |
| Timeline |
| FEMALE HEALTH |
| KRISPY KREME DL |
FEMALE HEALTH and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and KRISPY KREME
The main advantage of trading using opposite FEMALE HEALTH and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. GREENX METALS LTD | FEMALE HEALTH vs. Cogent Communications Holdings | FEMALE HEALTH vs. Chunghwa Telecom Co | FEMALE HEALTH vs. Mobilezone Holding AG |
| KRISPY KREME vs. Loblaw Companies Limited | KRISPY KREME vs. Superior Plus Corp | KRISPY KREME vs. NMI Holdings | KRISPY KREME vs. Origin Agritech |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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