Correlation Between Inepar SA and Karsten SA
Can any of the company-specific risk be diversified away by investing in both Inepar SA and Karsten SA 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 Inepar SA and Karsten SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inepar SA Indstria and Karsten SA, you can compare the effects of market volatilities on Inepar SA and Karsten SA 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 Inepar SA with a short position of Karsten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inepar SA and Karsten SA.
Diversification Opportunities for Inepar SA and Karsten SA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inepar and Karsten is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Inepar SA Indstria and Karsten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karsten SA and Inepar 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 Inepar SA Indstria are associated (or correlated) with Karsten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karsten SA has no effect on the direction of Inepar SA i.e., Inepar SA and Karsten SA go up and down completely randomly.
Pair Corralation between Inepar SA and Karsten SA
Assuming the 90 days trading horizon Inepar SA Indstria is expected to generate 3.7 times more return on investment than Karsten SA. However, Inepar SA is 3.7 times more volatile than Karsten SA. It trades about 0.02 of its potential returns per unit of risk. Karsten SA is currently generating about 0.06 per unit of risk. If you would invest 495.00 in Inepar SA Indstria on September 13, 2024 and sell it today you would lose (336.00) from holding Inepar SA Indstria or give up 67.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.0% |
| Values | Daily Returns |
Inepar SA Indstria vs. Karsten SA
Performance |
| Timeline |
| Inepar SA Indstria |
| Karsten SA |
Inepar SA and Karsten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inepar SA and Karsten SA
The main advantage of trading using opposite Inepar SA and Karsten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inepar SA position performs unexpectedly, Karsten SA 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 Karsten SA will offset losses from the drop in Karsten SA's long position.| Inepar SA vs. Lupatech SA | Inepar SA vs. Inepar SA Indstria | Inepar SA vs. Eternit SA | Inepar SA vs. Bombril SA |
| Karsten SA vs. Springs Global Participaes | Karsten SA vs. Marcopolo SA | Karsten SA vs. Inepar SA Indstria | Karsten SA vs. BTG Pactual Logstica |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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