Correlation Between Karsten SA and Gen Digital
Can any of the company-specific risk be diversified away by investing in both Karsten SA and Gen Digital 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 Gen Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsten SA and Gen Digital, you can compare the effects of market volatilities on Karsten SA and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsten SA and Gen Digital.
Diversification Opportunities for Karsten SA and Gen Digital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Karsten and Gen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Karsten SA and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of Karsten SA i.e., Karsten SA and Gen Digital go up and down completely randomly.
Pair Corralation between Karsten SA and Gen Digital
If you would invest 2,189 in Karsten SA on October 14, 2024 and sell it today you would lose (39.00) from holding Karsten SA or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karsten SA vs. Gen Digital
Performance |
| Timeline |
| Karsten SA |
| Gen Digital |
Karsten SA and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karsten SA and Gen Digital
The main advantage of trading using opposite Karsten SA and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsten SA position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Karsten SA | Karsten SA vs. Dhler SA |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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