Correlation Between Karsten SA and Pettenati
Can any of the company-specific risk be diversified away by investing in both Karsten SA and Pettenati 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 Karsten SA and Pettenati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsten SA and Pettenati SA Industria, you can compare the effects of market volatilities on Karsten SA and Pettenati 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 Karsten SA with a short position of Pettenati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsten SA and Pettenati.
Diversification Opportunities for Karsten SA and Pettenati
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Karsten and Pettenati is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Karsten SA and Pettenati SA Industria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pettenati SA Industria and Karsten SA 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 Karsten SA are associated (or correlated) with Pettenati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pettenati SA Industria has no effect on the direction of Karsten SA i.e., Karsten SA and Pettenati go up and down completely randomly.
Pair Corralation between Karsten SA and Pettenati
Assuming the 90 days trading horizon Karsten SA is expected to generate 1.68 times more return on investment than Pettenati. However, Karsten SA is 1.68 times more volatile than Pettenati SA Industria. It trades about 0.42 of its potential returns per unit of risk. Pettenati SA Industria is currently generating about 0.09 per unit of risk. If you would invest 2,145 in Karsten SA on November 28, 2024 and sell it today you would earn a total of 1,264 from holding Karsten SA or generate 58.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Karsten SA vs. Pettenati SA Industria
Performance |
| Timeline |
| Karsten SA |
| Pettenati SA Industria |
Karsten SA and Pettenati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karsten SA and Pettenati
The main advantage of trading using opposite Karsten SA and Pettenati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsten SA position performs unexpectedly, Pettenati 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 Pettenati will offset losses from the drop in Pettenati's long position.| Karsten SA vs. Costco Wholesale | Karsten SA vs. Multilaser Industrial SA | Karsten SA vs. Tres Tentos Agroindustrial | Karsten SA vs. METISA Metalrgica Timboense |
| Pettenati vs. Companhia de Tecidos | Pettenati vs. Companhia de Tecidos | Pettenati vs. Karsten SA | Pettenati vs. Karsten SA |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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