Correlation Between Loblaw Companies and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Loblaw Companies 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 Loblaw Companies and KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loblaw Companies Limited and KRISPY KREME DL 01, you can compare the effects of market volatilities on Loblaw Companies 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 Loblaw Companies with a short position of KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and KRISPY KREME.
Diversification Opportunities for Loblaw Companies and KRISPY KREME
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Loblaw and KRISPY is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited 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 Loblaw Companies 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 Loblaw Companies Limited 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 Loblaw Companies i.e., Loblaw Companies and KRISPY KREME go up and down completely randomly.
Pair Corralation between Loblaw Companies and KRISPY KREME
Assuming the 90 days horizon Loblaw Companies Limited is expected to generate 0.54 times more return on investment than KRISPY KREME. However, Loblaw Companies Limited is 1.85 times less risky than KRISPY KREME. It trades about 0.11 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.02 per unit of risk. If you would invest 11,600 in Loblaw Companies Limited on August 29, 2024 and sell it today you would earn a total of 500.00 from holding Loblaw Companies Limited or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loblaw Companies Limited vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Loblaw Companies |
| KRISPY KREME DL |
Loblaw Companies and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and KRISPY KREME
The main advantage of trading using opposite Loblaw Companies and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies 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.| Loblaw Companies vs. MAVEN WIRELESS SWEDEN | Loblaw Companies vs. COPLAND ROAD CAPITAL | Loblaw Companies vs. VARIOUS EATERIES LS | Loblaw Companies vs. SWISS WATER DECAFFCOFFEE |
| KRISPY KREME vs. TOREX SEMICONDUCTOR LTD | KRISPY KREME vs. CARSALESCOM | KRISPY KREME vs. Magnachip Semiconductor | KRISPY KREME vs. Tradeweb Markets |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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