Correlation Between Reinsurance Group and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Reinsurance Group 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 Reinsurance Group and KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinsurance Group of and KRISPY KREME DL 01, you can compare the effects of market volatilities on Reinsurance Group 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 Reinsurance Group with a short position of KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinsurance Group and KRISPY KREME.
Diversification Opportunities for Reinsurance Group and KRISPY KREME
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Reinsurance and KRISPY is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Reinsurance Group of 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 Reinsurance Group 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 Reinsurance Group of 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 Reinsurance Group i.e., Reinsurance Group and KRISPY KREME go up and down completely randomly.
Pair Corralation between Reinsurance Group and KRISPY KREME
Assuming the 90 days trading horizon Reinsurance Group of is expected to generate 0.88 times more return on investment than KRISPY KREME. However, Reinsurance Group of is 1.13 times less risky than KRISPY KREME. It trades about 0.07 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.06 per unit of risk. If you would invest 19,714 in Reinsurance Group of on October 14, 2024 and sell it today you would earn a total of 1,686 from holding Reinsurance Group of or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinsurance Group of vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Reinsurance Group |
| KRISPY KREME DL |
Reinsurance Group and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinsurance Group and KRISPY KREME
The main advantage of trading using opposite Reinsurance Group and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinsurance Group 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.| Reinsurance Group vs. CITY OFFICE REIT | Reinsurance Group vs. CAIRN HOMES EO | Reinsurance Group vs. INVITATION HOMES DL | Reinsurance Group vs. BORR DRILLING NEW |
| KRISPY KREME vs. Insurance Australia Group | KRISPY KREME vs. REVO INSURANCE SPA | KRISPY KREME vs. Reinsurance Group of | KRISPY KREME vs. Direct Line Insurance |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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