Correlation Between Krispy Kreme and Kesko Oyj
Can any of the company-specific risk be diversified away by investing in both Krispy Kreme and Kesko Oyj 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 Kesko Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krispy Kreme and Kesko Oyj ADR, you can compare the effects of market volatilities on Krispy Kreme and Kesko Oyj 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 Kesko Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krispy Kreme and Kesko Oyj.
Diversification Opportunities for Krispy Kreme and Kesko Oyj
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Krispy and Kesko is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Krispy Kreme and Kesko Oyj ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kesko Oyj ADR 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 Kesko Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kesko Oyj ADR has no effect on the direction of Krispy Kreme i.e., Krispy Kreme and Kesko Oyj go up and down completely randomly.
Pair Corralation between Krispy Kreme and Kesko Oyj
Given the investment horizon of 90 days Krispy Kreme is expected to under-perform the Kesko Oyj. In addition to that, Krispy Kreme is 3.21 times more volatile than Kesko Oyj ADR. It trades about -0.21 of its total potential returns per unit of risk. Kesko Oyj ADR is currently generating about 0.09 per unit of volatility. If you would invest 932.00 in Kesko Oyj ADR on December 28, 2024 and sell it today you would earn a total of 69.00 from holding Kesko Oyj ADR or generate 7.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.36% |
Values | Daily Returns |
Krispy Kreme vs. Kesko Oyj ADR
Performance |
Timeline |
Krispy Kreme |
Kesko Oyj ADR |
Krispy Kreme and Kesko Oyj Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Krispy Kreme and Kesko Oyj
The main advantage of trading using opposite Krispy Kreme and Kesko Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krispy Kreme position performs unexpectedly, Kesko Oyj 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 Kesko Oyj will offset losses from the drop in Kesko Oyj's long position.Krispy Kreme vs. Natural Grocers by | Krispy Kreme vs. Sprouts Farmers Market | Krispy Kreme vs. Albertsons Companies | Krispy Kreme vs. Ingles Markets Incorporated |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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