Correlation Between Krispy Kreme and Nascent Wine

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

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

Diversification Opportunities for Krispy Kreme and Nascent Wine

0.0

Correlation Coefficient

Krispy Kreme  Nascent Wine

Pay attention - limited upside

The 3 months correlation between Krispy and Nascent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Krispy Kreme and Nascent Wine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nascent Wine 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 Nascent Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nascent Wine has no effect on the direction of Krispy Kreme i.e., Krispy Kreme and Nascent Wine go up and down completely randomly.

Pair Corralation between Krispy Kreme and Nascent Wine

If you would invest  1,074  in Krispy Kreme on September 29, 2024 and sell it today you would lose (96.00) from holding Krispy Kreme or give up 8.94% of portfolio value over 90 days.

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

Krispy Kreme  vs.  Nascent Wine

Krispy Kreme

Risk-Adjusted Performance

0 of 100

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 latest inconsistent performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nascent Wine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nascent Wine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Nascent Wine is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Krispy Kreme and Nascent Wine

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

The idea behind Krispy Kreme and Nascent Wine 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.