Correlation Between Pettenati and Karsten SA
Can any of the company-specific risk be diversified away by investing in both Pettenati and Karsten SA 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 Pettenati and Karsten SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pettenati SA Industria and Karsten SA, you can compare the effects of market volatilities on Pettenati and Karsten SA 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 Pettenati with a short position of Karsten SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pettenati and Karsten SA.
Diversification Opportunities for Pettenati and Karsten SA
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pettenati and Karsten is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Pettenati SA Industria and Karsten SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karsten SA and Pettenati 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 Pettenati SA Industria are associated (or correlated) with Karsten SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karsten SA has no effect on the direction of Pettenati i.e., Pettenati and Karsten SA go up and down completely randomly.
Pair Corralation between Pettenati and Karsten SA
Assuming the 90 days trading horizon Pettenati SA Industria is expected to generate 0.93 times more return on investment than Karsten SA. However, Pettenati SA Industria is 1.07 times less risky than Karsten SA. It trades about 0.29 of its potential returns per unit of risk. Karsten SA is currently generating about 0.21 per unit of risk. If you would invest 568.00 in Pettenati SA Industria on November 8, 2024 and sell it today you would earn a total of 85.00 from holding Pettenati SA Industria or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pettenati SA Industria vs. Karsten SA
Performance |
| Timeline |
| Pettenati SA Industria |
| Karsten SA |
Pettenati and Karsten SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pettenati and Karsten SA
The main advantage of trading using opposite Pettenati and Karsten SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pettenati position performs unexpectedly, Karsten SA 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 Karsten SA will offset losses from the drop in Karsten SA's long position.| Pettenati vs. Schulz SA | Pettenati vs. Springs Global Participaes | Pettenati vs. Grazziotin SA | Pettenati vs. Companhia de Tecidos |
| Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Pettenati SA Industria | Karsten SA vs. Companhia Tecidos Santanense | Karsten SA vs. Dhler SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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