Correlation Between Autogrill SpA and Just Kitchen

Can any of the company-specific risk be diversified away by investing in both Autogrill SpA and Just Kitchen 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 Autogrill SpA and Just Kitchen into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Autogrill SpA ADR and Just Kitchen Holdings, you can compare the effects of market volatilities on Autogrill SpA and Just Kitchen 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 Autogrill SpA with a short position of Just Kitchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autogrill SpA and Just Kitchen.

Diversification Opportunities for Autogrill SpA and Just Kitchen

0.36

Correlation Coefficient

Autogrill SpA  Just Kitchen

Weak diversification

The 3 months correlation between Autogrill and Just is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Autogrill SpA ADR and Just Kitchen Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Just Kitchen Holdings and Autogrill SpA 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 Autogrill SpA ADR are associated (or correlated) with Just Kitchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Just Kitchen Holdings has no effect on the direction of Autogrill SpA i.e., Autogrill SpA and Just Kitchen go up and down completely randomly.

Pair Corralation between Autogrill SpA and Just Kitchen

Assuming the 90 days horizon Autogrill SpA ADR is expected to generate 0.28 times more return on investment than Just Kitchen. However, Autogrill SpA ADR is 3.52 times less risky than Just Kitchen. It trades about 0.08 of its potential returns per unit of risk. Just Kitchen Holdings is currently generating about 0.02 per unit of risk. If you would invest  625.00  in Autogrill SpA ADR on September 1, 2024 and sell it today you would earn a total of  200.00  from holding Autogrill SpA ADR or generate 32.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.35%
Values	Daily Returns

Autogrill SpA ADR  vs.  Just Kitchen Holdings

Autogrill SpA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autogrill SpA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Autogrill SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Just Kitchen Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Just Kitchen Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Just Kitchen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Autogrill SpA and Just Kitchen

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

The idea behind Autogrill SpA ADR and Just Kitchen Holdings 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.