Correlation Between Highlight Communications and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and KRISPY KREME DL 01, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and KRISPY KREME.
Diversification Opportunities for Highlight Communications and KRISPY KREME
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highlight and KRISPY is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG 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 Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and KRISPY KREME go up and down completely randomly.
Pair Corralation between Highlight Communications and KRISPY KREME
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 0.8 times more return on investment than KRISPY KREME. However, Highlight Communications AG is 1.25 times less risky than KRISPY KREME. It trades about 0.34 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about 0.0 per unit of risk. If you would invest 98.00 in Highlight Communications AG on August 31, 2024 and sell it today you would earn a total of 22.00 from holding Highlight Communications AG or generate 22.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Highlight Communications |
| KRISPY KREME DL |
Highlight Communications and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and KRISPY KREME
The main advantage of trading using opposite Highlight Communications and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Netflix | Highlight Communications vs. Warner Music Group | Highlight Communications vs. ViacomCBS | Highlight Communications vs. Superior Plus Corp |
| KRISPY KREME vs. Highlight Communications AG | KRISPY KREME vs. Playtech plc | KRISPY KREME vs. PLAYSTUDIOS A DL 0001 | KRISPY KREME vs. LG Display Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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