Correlation Between KRISPY KREME and United Internet
Can any of the company-specific risk be diversified away by investing in both KRISPY KREME and United Internet 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 United Internet 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 United Internet AG, you can compare the effects of market volatilities on KRISPY KREME and United Internet 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 United Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of KRISPY KREME and United Internet.
Diversification Opportunities for KRISPY KREME and United Internet
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between KRISPY and United is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KRISPY KREME DL 01 and United Internet AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Internet 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 United Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Internet AG has no effect on the direction of KRISPY KREME i.e., KRISPY KREME and United Internet go up and down completely randomly.
Pair Corralation between KRISPY KREME and United Internet
Assuming the 90 days horizon KRISPY KREME DL 01 is expected to under-perform the United Internet. In addition to that, KRISPY KREME is 2.1 times more volatile than United Internet AG. It trades about -0.18 of its total potential returns per unit of risk. United Internet AG is currently generating about 0.09 per unit of volatility. If you would invest 1,572 in United Internet AG on December 3, 2024 and sell it today you would earn a total of 174.00 from holding United Internet AG or generate 11.07% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
KRISPY KREME DL 01 vs. United Internet AG
Performance |
Timeline |
KRISPY KREME DL |
United Internet AG |
KRISPY KREME and United Internet Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KRISPY KREME and United Internet
The main advantage of trading using opposite KRISPY KREME and United Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KRISPY KREME position performs unexpectedly, United Internet 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 United Internet will offset losses from the drop in United Internet's long position.KRISPY KREME vs. Alfa Financial Software | KRISPY KREME vs. Computer And Technologies | KRISPY KREME vs. Easy Software AG | KRISPY KREME vs. Beta Systems Software |
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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 Stocks Directory module to find actively traded stocks across global markets.
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