Correlation Between Simplify Exchange and Karat Packaging
Can any of the company-specific risk be diversified away by investing in both Simplify Exchange and Karat Packaging 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 Simplify Exchange and Karat Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Simplify Exchange Traded and Karat Packaging, you can compare the effects of market volatilities on Simplify Exchange and Karat Packaging 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 Simplify Exchange with a short position of Karat Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simplify Exchange and Karat Packaging.
Diversification Opportunities for Simplify Exchange and Karat Packaging
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Simplify and Karat is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Simplify Exchange Traded and Karat Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karat Packaging and Simplify Exchange 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 Simplify Exchange Traded are associated (or correlated) with Karat Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karat Packaging has no effect on the direction of Simplify Exchange i.e., Simplify Exchange and Karat Packaging go up and down completely randomly.
Pair Corralation between Simplify Exchange and Karat Packaging
Considering the 90-day investment horizon Simplify Exchange Traded is expected to generate 0.44 times more return on investment than Karat Packaging. However, Simplify Exchange Traded is 2.27 times less risky than Karat Packaging. It trades about 0.24 of its potential returns per unit of risk. Karat Packaging is currently generating about -0.06 per unit of risk. If you would invest 2,781 in Simplify Exchange Traded on October 23, 2024 and sell it today you would earn a total of 88.00 from holding Simplify Exchange Traded or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Simplify Exchange Traded vs. Karat Packaging
Performance |
| Timeline |
| Simplify Exchange Traded |
| Karat Packaging |
Simplify Exchange and Karat Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Simplify Exchange and Karat Packaging
The main advantage of trading using opposite Simplify Exchange and Karat Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Simplify Exchange position performs unexpectedly, Karat Packaging 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 Karat Packaging will offset losses from the drop in Karat Packaging's long position.| Simplify Exchange vs. KFA Mount Lucas | Simplify Exchange vs. iMGP DBi Managed | Simplify Exchange vs. Simplify Interest Rate | Simplify Exchange vs. AGFiQ Market Neutral |
| Karat Packaging vs. Greif Bros | Karat Packaging vs. Reynolds Consumer Products | Karat Packaging vs. Silgan Holdings | Karat Packaging vs. O I Glass |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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