Correlation Between Karat Packaging and OShares Global
Can any of the company-specific risk be diversified away by investing in both Karat Packaging and OShares Global 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 Karat Packaging and OShares Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karat Packaging and OShares Global Internet, you can compare the effects of market volatilities on Karat Packaging and OShares Global 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 Karat Packaging with a short position of OShares Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karat Packaging and OShares Global.
Diversification Opportunities for Karat Packaging and OShares Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Karat and OShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Karat Packaging and OShares Global Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OShares Global Internet and Karat Packaging 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 Karat Packaging are associated (or correlated) with OShares Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OShares Global Internet has no effect on the direction of Karat Packaging i.e., Karat Packaging and OShares Global go up and down completely randomly.
Pair Corralation between Karat Packaging and OShares Global
Considering the 90-day investment horizon Karat Packaging is expected to generate 2.23 times more return on investment than OShares Global. However, Karat Packaging is 2.23 times more volatile than OShares Global Internet. It trades about 0.32 of its potential returns per unit of risk. OShares Global Internet is currently generating about 0.46 per unit of risk. If you would invest 2,641 in Karat Packaging on September 3, 2024 and sell it today you would earn a total of 448.00 from holding Karat Packaging or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karat Packaging vs. OShares Global Internet
Performance |
| Timeline |
| Karat Packaging |
| OShares Global Internet |
Karat Packaging and OShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karat Packaging and OShares Global
The main advantage of trading using opposite Karat Packaging and OShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karat Packaging position performs unexpectedly, OShares Global 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 OShares Global will offset losses from the drop in OShares Global's long position.| Karat Packaging vs. Greif Bros | Karat Packaging vs. Reynolds Consumer Products | Karat Packaging vs. Silgan Holdings | Karat Packaging vs. O I Glass |
| OShares Global vs. OShares Quality Dividend | OShares Global vs. WisdomTree Cloud Computing | OShares Global vs. Amplify Online Retail | OShares Global vs. ProShares Online Retail |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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