Correlation Between KRISPY KREME and EBay

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and EBay 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 EBay 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 eBay Inc, you can compare the effects of market volatilities on KRISPY KREME and EBay 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 EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and EBay.

Diversification Opportunities for KRISPY KREME and EBay

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between KRISPY and EBay is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc 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 EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and EBay go up and down completely randomly.

Pair Corralation between KRISPY KREME and EBay

Assuming the 90 days horizon KRISPY KREME is expected to generate 2.19 times less return on investment than EBay. In addition to that, KRISPY KREME is 1.5 times more volatile than eBay Inc. It trades about 0.04 of its total potential returns per unit of risk. eBay Inc is currently generating about 0.13 per unit of volatility. If you would invest  5,322  in eBay Inc on September 1, 2024 and sell it today you would earn a total of  726.00  from holding eBay Inc or generate 13.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy98.48%
ValuesDaily Returns

KRISPY KREME DL 01  vs.  eBay Inc

 Performance 
       Timeline  
KRISPY KREME DL 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in KRISPY KREME DL 01 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KRISPY KREME is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.
eBay Inc 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in eBay Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, EBay unveiled solid returns over the last few months and may actually be approaching a breakup point.

KRISPY KREME and EBay Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with KRISPY KREME and EBay

The main advantage of trading using opposite KRISPY KREME and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, EBay 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 EBay will offset losses from the drop in EBay's long position.
The idea behind KRISPY KREME DL 01 and eBay Inc 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios