Correlation Between KRISPY KREME and AlzChem Group

Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and AlzChem Group 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 KRISPY KREME and AlzChem Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KRISPY KREME DL 01 and AlzChem Group AG, you can compare the effects of market volatilities on KRISPY KREME and AlzChem Group 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 KRISPY KREME with a short position of AlzChem Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and AlzChem Group.

Diversification Opportunities for KRISPY KREME and AlzChem Group

-0.8

Correlation Coefficient

KRISPY KREME  AlzChem Group

Pay attention - limited upside

The 3 months correlation between KRISPY and AlzChem is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and AlzChem Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AlzChem Group AG and KRISPY KREME 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 KRISPY KREME DL 01 are associated (or correlated) with AlzChem Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AlzChem Group AG has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and AlzChem Group go up and down completely randomly.

Pair Corralation between KRISPY KREME and AlzChem Group

Assuming the 90 days horizon KRISPY KREME DL 01 is expected to under-perform the AlzChem Group. In addition to that, KRISPY KREME is 1.27 times more volatile than AlzChem Group AG. It trades about -0.18 of its total potential returns per unit of risk. AlzChem Group AG is currently generating about 0.25 per unit of volatility. If you would invest  5,660  in AlzChem Group AG on December 29, 2024 and sell it today you would earn a total of  3,960  from holding AlzChem Group AG or generate 69.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

KRISPY KREME DL 01  vs.  AlzChem Group AG

KRISPY KREME DL

Risk-Adjusted Performance

Very Weak

Over the last 90 days KRISPY KREME DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

AlzChem Group AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AlzChem Group AG are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, AlzChem Group exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KRISPY KREME and AlzChem Group

The main advantage of trading using opposite KRISPY KREME and AlzChem Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, AlzChem Group 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 AlzChem Group will offset losses from the drop in AlzChem Group's long position.

The idea behind KRISPY KREME DL 01 and AlzChem Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.