Correlation Between Karooooo and American Software
Can any of the company-specific risk be diversified away by investing in both Karooooo and American Software 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 Karooooo and American Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karooooo and American Software, you can compare the effects of market volatilities on Karooooo and American Software 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 Karooooo with a short position of American Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karooooo and American Software.
Diversification Opportunities for Karooooo and American Software
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Karooooo and American is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Karooooo and American Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Software and Karooooo 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 Karooooo are associated (or correlated) with American Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Software has no effect on the direction of Karooooo i.e., Karooooo and American Software go up and down completely randomly.
Pair Corralation between Karooooo and American Software
If you would invest 3,983 in Karooooo on August 28, 2024 and sell it today you would earn a total of 137.00 from holding Karooooo or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Karooooo vs. American Software
Performance |
| Timeline |
| Karooooo |
| American Software |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Karooooo and American Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karooooo and American Software
The main advantage of trading using opposite Karooooo and American Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karooooo position performs unexpectedly, American Software 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 American Software will offset losses from the drop in American Software's long position.| Karooooo vs. Meridianlink | Karooooo vs. CoreCard Corp | Karooooo vs. Enfusion | Karooooo vs. Alkami Technology |
| American Software vs. Paycor HCM | American Software vs. Appfolio | American Software vs. Agilysys | American Software vs. Meridianlink |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |