Correlation Between Karat Packaging and XWEB
Can any of the company-specific risk be diversified away by investing in both Karat Packaging and XWEB 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 XWEB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karat Packaging and XWEB, you can compare the effects of market volatilities on Karat Packaging and XWEB 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 XWEB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karat Packaging and XWEB.
Diversification Opportunities for Karat Packaging and XWEB
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Karat and XWEB is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Karat Packaging and XWEB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XWEB 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 XWEB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XWEB has no effect on the direction of Karat Packaging i.e., Karat Packaging and XWEB go up and down completely randomly.
Pair Corralation between Karat Packaging and XWEB
If you would invest 2,747 in Karat Packaging on September 3, 2024 and sell it today you would earn a total of 379.00 from holding Karat Packaging or generate 13.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.8% |
| Values | Daily Returns |
Karat Packaging vs. XWEB
Performance |
| Timeline |
| Karat Packaging |
| XWEB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Karat Packaging and XWEB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karat Packaging and XWEB
The main advantage of trading using opposite Karat Packaging and XWEB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karat Packaging position performs unexpectedly, XWEB 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 XWEB will offset losses from the drop in XWEB'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 |
| XWEB vs. SPDR FactSet Innovative | XWEB vs. SPDR SP Software | XWEB vs. SPDR Morgan Stanley | XWEB vs. SPDR SP Health |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |