Correlation Between Karat Packaging and Retailing Fund
Can any of the company-specific risk be diversified away by investing in both Karat Packaging and Retailing Fund 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 Retailing Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karat Packaging and Retailing Fund Investor, you can compare the effects of market volatilities on Karat Packaging and Retailing Fund 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 Retailing Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karat Packaging and Retailing Fund.
Diversification Opportunities for Karat Packaging and Retailing Fund
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Karat and Retailing is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Karat Packaging and Retailing Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Investor 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 Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Investor has no effect on the direction of Karat Packaging i.e., Karat Packaging and Retailing Fund go up and down completely randomly.
Pair Corralation between Karat Packaging and Retailing Fund
Considering the 90-day investment horizon Karat Packaging is expected to generate 2.59 times more return on investment than Retailing Fund. However, Karat Packaging is 2.59 times more volatile than Retailing Fund Investor. It trades about 0.08 of its potential returns per unit of risk. Retailing Fund Investor is currently generating about 0.06 per unit of risk. If you would invest 1,375 in Karat Packaging on November 2, 2024 and sell it today you would earn a total of 1,786 from holding Karat Packaging or generate 129.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Karat Packaging vs. Retailing Fund Investor
Performance |
| Timeline |
| Karat Packaging |
| Retailing Fund Investor |
Karat Packaging and Retailing Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karat Packaging and Retailing Fund
The main advantage of trading using opposite Karat Packaging and Retailing Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karat Packaging position performs unexpectedly, Retailing Fund 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 Retailing Fund will offset losses from the drop in Retailing Fund'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 |
| Retailing Fund vs. Leisure Fund Investor | Retailing Fund vs. Banking Fund Investor | Retailing Fund vs. Technology Fund Investor | Retailing Fund vs. Financial Services Fund |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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