Correlation Between Ingles Markets and Krispy Kreme
Can any of the company-specific risk be diversified away by investing in both Ingles Markets 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 Ingles Markets and Krispy Kreme into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingles Markets Incorporated and Krispy Kreme, you can compare the effects of market volatilities on Ingles Markets 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 Ingles Markets with a short position of Krispy Kreme. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingles Markets and Krispy Kreme.
Diversification Opportunities for Ingles Markets and Krispy Kreme
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ingles and Krispy is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ingles Markets Incorporated and Krispy Kreme in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krispy Kreme and Ingles Markets 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 Ingles Markets Incorporated 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 Ingles Markets i.e., Ingles Markets and Krispy Kreme go up and down completely randomly.
Pair Corralation between Ingles Markets and Krispy Kreme
Assuming the 90 days horizon Ingles Markets is expected to generate 1.8 times less return on investment than Krispy Kreme. But when comparing it to its historical volatility, Ingles Markets Incorporated is 1.47 times less risky than Krispy Kreme. It trades about 0.03 of its potential returns per unit of risk. Krispy Kreme is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Krispy Kreme on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Krispy Kreme or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ingles Markets Incorporated vs. Krispy Kreme
Performance |
| Timeline |
| Ingles Markets |
| Krispy Kreme |
Ingles Markets and Krispy Kreme Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ingles Markets and Krispy Kreme
The main advantage of trading using opposite Ingles Markets and Krispy Kreme positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingles Markets 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.| Ingles Markets vs. Weis Markets | Ingles Markets vs. Natural Grocers by | Ingles Markets vs. Sendas Distribuidora SA | Ingles Markets vs. Grocery Outlet Holding |
| Krispy Kreme vs. Sendas Distribuidora SA | Krispy Kreme vs. Natural Grocers by | Krispy Kreme vs. Sprouts Farmers Market | Krispy Kreme vs. Albertsons Companies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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