Correlation Between Krispy Kreme and Hesai Group

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

By analyzing existing cross correlation between Krispy Kreme and Hesai Group American, you can compare the effects of market volatilities on Krispy Kreme and Hesai 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krispy Kreme and Hesai Group.

Diversification Opportunities for Krispy Kreme and Hesai Group

-0.87

Correlation Coefficient

Krispy Kreme  Hesai Group

Pay attention - limited upside

The 3 months correlation between Krispy and Hesai is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Krispy Kreme and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 are associated (or correlated) with Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Krispy Kreme i.e., Krispy Kreme and Hesai Group go up and down completely randomly.

Pair Corralation between Krispy Kreme and Hesai Group

Given the investment horizon of 90 days Krispy Kreme is expected to under-perform the Hesai Group. But the stock apears to be less risky and, when comparing its historical volatility, Krispy Kreme is 2.2 times less risky than Hesai Group. The stock trades about -0.23 of its potential returns per unit of risk. The Hesai Group American is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  818.00  in Hesai Group American on November 28, 2024 and sell it today you would earn a total of  1,033  from holding Hesai Group American or generate 126.28% return on investment over 90 days.

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

Krispy Kreme  vs.  Hesai Group American

Krispy Kreme

Risk-Adjusted Performance

Very Weak

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

Hesai Group American

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hesai Group American are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Hesai Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Krispy Kreme and Hesai Group

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

The idea behind Krispy Kreme and Hesai Group American 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.