Correlation Between Kri Kri and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kri Kri and Dow Jones 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 Kri Kri and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kri Kri Milk Industry and Dow Jones Industrial, you can compare the effects of market volatilities on Kri Kri and Dow Jones 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 Kri Kri with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kri Kri and Dow Jones.
Diversification Opportunities for Kri Kri and Dow Jones
Very poor diversification
The 3 months correlation between Kri and Dow is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kri Kri Milk Industry and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Kri Kri 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 Kri Kri Milk Industry are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Kri Kri i.e., Kri Kri and Dow Jones go up and down completely randomly.
Pair Corralation between Kri Kri and Dow Jones
Assuming the 90 days trading horizon Kri Kri Milk Industry is expected to generate 2.21 times more return on investment than Dow Jones. However, Kri Kri is 2.21 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 598.00 in Kri Kri Milk Industry on August 24, 2024 and sell it today you would earn a total of 832.00 from holding Kri Kri Milk Industry or generate 139.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.99% |
| Values | Daily Returns |
Kri Kri Milk Industry vs. Dow Jones Industrial
Performance |
| Timeline |
Kri Kri and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kri Kri Milk Industry
Pair trading matchups for Kri Kri
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kri Kri and Dow Jones
The main advantage of trading using opposite Kri Kri and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kri Kri position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Kri Kri vs. Motor Oil Corinth | Kri Kri vs. Mytilineos SA | Kri Kri vs. Gr Sarantis SA | Kri Kri vs. Aegean Airlines SA |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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