Correlation Between Karsten SA and Companhia
Can any of the company-specific risk be diversified away by investing in both Karsten SA and Companhia 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 Karsten SA and Companhia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Karsten SA and Companhia de Fiacao, you can compare the effects of market volatilities on Karsten SA and Companhia 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 Karsten SA with a short position of Companhia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karsten SA and Companhia.
Diversification Opportunities for Karsten SA and Companhia
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Karsten and Companhia is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Karsten SA and Companhia de Fiacao in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia de Fiacao and Karsten SA 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 Karsten SA are associated (or correlated) with Companhia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia de Fiacao has no effect on the direction of Karsten SA i.e., Karsten SA and Companhia go up and down completely randomly.
Pair Corralation between Karsten SA and Companhia
Assuming the 90 days trading horizon Karsten SA is expected to generate 0.81 times more return on investment than Companhia. However, Karsten SA is 1.24 times less risky than Companhia. It trades about 0.06 of its potential returns per unit of risk. Companhia de Fiacao is currently generating about 0.04 per unit of risk. If you would invest 1,900 in Karsten SA on September 24, 2024 and sell it today you would earn a total of 161.00 from holding Karsten SA or generate 8.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Karsten SA vs. Companhia de Fiacao
Performance |
Timeline |
Karsten SA |
Companhia de Fiacao |
Karsten SA and Companhia Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Karsten SA and Companhia
The main advantage of trading using opposite Karsten SA and Companhia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karsten SA position performs unexpectedly, Companhia 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 Companhia will offset losses from the drop in Companhia's long position.Karsten SA vs. Companhia de Gs | Karsten SA vs. Springs Global Participaes | Karsten SA vs. Companhia de Tecidos | Karsten SA vs. Marcopolo SA |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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