Correlation Between KRISPY KREME and Clearside Biomedical

Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and Clearside Biomedical 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 Clearside Biomedical 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 Clearside Biomedical, you can compare the effects of market volatilities on KRISPY KREME and Clearside Biomedical 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 Clearside Biomedical. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and Clearside Biomedical.

Diversification Opportunities for KRISPY KREME and Clearside Biomedical

-0.06

Correlation Coefficient

KRISPY KREME  Clearside Biomedical

Good diversification

The 3 months correlation between KRISPY and Clearside is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and Clearside Biomedical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearside Biomedical 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 Clearside Biomedical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearside Biomedical has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and Clearside Biomedical go up and down completely randomly.

Pair Corralation between KRISPY KREME and Clearside Biomedical

Assuming the 90 days horizon KRISPY KREME DL 01 is expected to under-perform the Clearside Biomedical. But the stock apears to be less risky and, when comparing its historical volatility, KRISPY KREME DL 01 is 1.32 times less risky than Clearside Biomedical. The stock trades about -0.03 of its potential returns per unit of risk. The Clearside Biomedical is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  105.00  in Clearside Biomedical on September 25, 2024 and sell it today you would lose (19.00) from holding Clearside Biomedical or give up 18.1% of portfolio value over 90 days.

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

KRISPY KREME DL 01  vs.  Clearside Biomedical

KRISPY KREME DL

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, KRISPY KREME is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Clearside Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearside Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with KRISPY KREME and Clearside Biomedical

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

The idea behind KRISPY KREME DL 01 and Clearside Biomedical 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..