Correlation Between Highwoods Properties and Karat Packaging
Can any of the company-specific risk be diversified away by investing in both Highwoods Properties 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 Highwoods Properties and Karat Packaging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwoods Properties and Karat Packaging, you can compare the effects of market volatilities on Highwoods Properties 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 Highwoods Properties with a short position of Karat Packaging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwoods Properties and Karat Packaging.
Diversification Opportunities for Highwoods Properties and Karat Packaging
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Highwoods and Karat is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Highwoods Properties and Karat Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karat Packaging and Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties i.e., Highwoods Properties and Karat Packaging go up and down completely randomly.
Pair Corralation between Highwoods Properties and Karat Packaging
Considering the 90-day investment horizon Highwoods Properties is expected to under-perform the Karat Packaging. But the stock apears to be less risky and, when comparing its historical volatility, Highwoods Properties is 1.96 times less risky than Karat Packaging. The stock trades about -0.19 of its potential returns per unit of risk. The Karat Packaging is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,638 in Karat Packaging on August 28, 2024 and sell it today you would earn a total of 453.00 from holding Karat Packaging or generate 17.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwoods Properties vs. Karat Packaging
Performance |
| Timeline |
| Highwoods Properties |
| Karat Packaging |
Highwoods Properties and Karat Packaging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwoods Properties and Karat Packaging
The main advantage of trading using opposite Highwoods Properties and Karat Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwoods Properties 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.| Highwoods Properties vs. Piedmont Office Realty | Highwoods Properties vs. Douglas Emmett | Highwoods Properties vs. Kilroy Realty Corp | Highwoods Properties vs. Hudson Pacific Properties |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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