Correlation Between Givaudan and Kraig Biocraft
Can any of the company-specific risk be diversified away by investing in both Givaudan and Kraig Biocraft 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 Givaudan and Kraig Biocraft into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Givaudan SA and Kraig Biocraft Labs, you can compare the effects of market volatilities on Givaudan and Kraig Biocraft 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 Givaudan with a short position of Kraig Biocraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Givaudan and Kraig Biocraft.
Diversification Opportunities for Givaudan and Kraig Biocraft
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Givaudan and Kraig is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Givaudan SA and Kraig Biocraft Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraig Biocraft Labs and Givaudan 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 Givaudan SA are associated (or correlated) with Kraig Biocraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraig Biocraft Labs has no effect on the direction of Givaudan i.e., Givaudan and Kraig Biocraft go up and down completely randomly.
Pair Corralation between Givaudan and Kraig Biocraft
Assuming the 90 days horizon Givaudan SA is expected to generate 0.53 times more return on investment than Kraig Biocraft. However, Givaudan SA is 1.87 times less risky than Kraig Biocraft. It trades about 0.0 of its potential returns per unit of risk. Kraig Biocraft Labs is currently generating about -0.13 per unit of risk. If you would invest 422,086 in Givaudan SA on December 6, 2024 and sell it today you would lose (1,750) from holding Givaudan SA or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Givaudan SA vs. Kraig Biocraft Labs
Performance |
| Timeline |
| Givaudan SA |
| Kraig Biocraft Labs |
Givaudan and Kraig Biocraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Givaudan and Kraig Biocraft
The main advantage of trading using opposite Givaudan and Kraig Biocraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Givaudan position performs unexpectedly, Kraig Biocraft 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 Kraig Biocraft will offset losses from the drop in Kraig Biocraft's long position.| Givaudan vs. Sika AG ADR | ||
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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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