Correlation Between Karsten SA and Electro Ao
Can any of the company-specific risk be diversified away by investing in both Karsten SA and Electro Ao 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 Electro Ao into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsten SA and Electro Ao Altona, you can compare the effects of market volatilities on Karsten SA and Electro Ao 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 Electro Ao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsten SA and Electro Ao.
Diversification Opportunities for Karsten SA and Electro Ao
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Karsten and Electro is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Karsten SA and Electro Ao Altona in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electro Ao Altona 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 Electro Ao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electro Ao Altona has no effect on the direction of Karsten SA i.e., Karsten SA and Electro Ao go up and down completely randomly.
Pair Corralation between Karsten SA and Electro Ao
If you would invest 1,133 in Electro Ao Altona on September 14, 2024 and sell it today you would earn a total of 193.00 from holding Electro Ao Altona or generate 17.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.78% |
| Values | Daily Returns |
Karsten SA vs. Electro Ao Altona
Performance |
| Timeline |
| Karsten SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Electro Ao Altona |
Karsten SA and Electro Ao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karsten SA and Electro Ao
The main advantage of trading using opposite Karsten SA and Electro Ao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsten SA position performs unexpectedly, Electro Ao 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 Electro Ao will offset losses from the drop in Electro Ao's long position.| Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Pettenati SA Industria | Karsten SA vs. Companhia Tecidos Santanense | Karsten SA vs. Dhler SA |
| Electro Ao vs. Electronic Arts | Electro Ao vs. Cognizant Technology Solutions | Electro Ao vs. United Airlines Holdings | Electro Ao vs. Align Technology |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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