Correlation Between Karsten SA and Companhia Tecidos
Can any of the company-specific risk be diversified away by investing in both Karsten SA and Companhia Tecidos 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 Companhia Tecidos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsten SA and Companhia Tecidos Santanense, you can compare the effects of market volatilities on Karsten SA and Companhia Tecidos 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 Companhia Tecidos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsten SA and Companhia Tecidos.
Diversification Opportunities for Karsten SA and Companhia Tecidos
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Karsten and Companhia is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Karsten SA and Companhia Tecidos Santanense in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Tecidos 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 Companhia Tecidos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Tecidos has no effect on the direction of Karsten SA i.e., Karsten SA and Companhia Tecidos go up and down completely randomly.
Pair Corralation between Karsten SA and Companhia Tecidos
Assuming the 90 days trading horizon Karsten SA is expected to generate 1.73 times more return on investment than Companhia Tecidos. However, Karsten SA is 1.73 times more volatile than Companhia Tecidos Santanense. It trades about 0.07 of its potential returns per unit of risk. Companhia Tecidos Santanense is currently generating about -0.41 per unit of risk. If you would invest 1,939 in Karsten SA on September 5, 2024 and sell it today you would earn a total of 73.00 from holding Karsten SA or generate 3.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Karsten SA vs. Companhia Tecidos Santanense
Performance |
| Timeline |
| Karsten SA |
| Companhia Tecidos |
Karsten SA and Companhia Tecidos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karsten SA and Companhia Tecidos
The main advantage of trading using opposite Karsten SA and Companhia Tecidos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsten SA position performs unexpectedly, Companhia Tecidos 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 Companhia Tecidos will offset losses from the drop in Companhia Tecidos' long position.| Karsten SA vs. Schulz SA | Karsten SA vs. Springs Global Participaes | Karsten SA vs. Grazziotin SA | Karsten SA vs. Marcopolo SA |
| Companhia Tecidos vs. Engie Brasil Energia | Companhia Tecidos vs. Grendene SA | Companhia Tecidos vs. M Dias Branco |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |