Correlation Between Karat Packaging and 3D Printing
Can any of the company-specific risk be diversified away by investing in both Karat Packaging and 3D Printing 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 3D Printing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karat Packaging and The 3D Printing, you can compare the effects of market volatilities on Karat Packaging and 3D Printing 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 3D Printing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karat Packaging and 3D Printing.
Diversification Opportunities for Karat Packaging and 3D Printing
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Karat and PRNT is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Karat Packaging and The 3D Printing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3D Printing 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 3D Printing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3D Printing has no effect on the direction of Karat Packaging i.e., Karat Packaging and 3D Printing go up and down completely randomly.
Pair Corralation between Karat Packaging and 3D Printing
Considering the 90-day investment horizon Karat Packaging is expected to generate 1.68 times more return on investment than 3D Printing. However, Karat Packaging is 1.68 times more volatile than The 3D Printing. It trades about 0.05 of its potential returns per unit of risk. The 3D Printing is currently generating about 0.04 per unit of risk. If you would invest 2,744 in Karat Packaging on September 1, 2024 and sell it today you would earn a total of 345.00 from holding Karat Packaging or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Karat Packaging vs. The 3D Printing
Performance |
| Timeline |
| Karat Packaging |
| 3D Printing |
Karat Packaging and 3D Printing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karat Packaging and 3D Printing
The main advantage of trading using opposite Karat Packaging and 3D Printing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karat Packaging position performs unexpectedly, 3D Printing 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 3D Printing will offset losses from the drop in 3D Printing'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 |
| 3D Printing vs. Nexalin Technology | 3D Printing vs. Kilroy Realty Corp | 3D Printing vs. Highwoods Properties | 3D Printing vs. Karat Packaging |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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