Correlation Between Karat Packaging and O I
Can any of the company-specific risk be diversified away by investing in both Karat Packaging and O I 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 O I into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karat Packaging and O I Glass, you can compare the effects of market volatilities on Karat Packaging and O I 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 O I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karat Packaging and O I.
Diversification Opportunities for Karat Packaging and O I
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Karat and O I is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Karat Packaging and O I Glass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on O I Glass 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 O I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of O I Glass has no effect on the direction of Karat Packaging i.e., Karat Packaging and O I go up and down completely randomly.
Pair Corralation between Karat Packaging and O I
Considering the 90-day investment horizon Karat Packaging is expected to generate 0.67 times more return on investment than O I. However, Karat Packaging is 1.5 times less risky than O I. It trades about 0.24 of its potential returns per unit of risk. O I Glass is currently generating about 0.09 per unit of risk. If you would invest 2,622 in Karat Packaging on August 24, 2024 and sell it today you would earn a total of 338.00 from holding Karat Packaging or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karat Packaging vs. O I Glass
Performance |
| Timeline |
| Karat Packaging |
| O I Glass |
Karat Packaging and O I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karat Packaging and O I
The main advantage of trading using opposite Karat Packaging and O I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karat Packaging position performs unexpectedly, O I 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 O I will offset losses from the drop in O I'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 |
| O I vs. International Paper | O I vs. Smurfit WestRock plc | O I vs. Avery Dennison Corp | O I vs. Crown Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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