Correlation Between Karmarts Public and Samart Public

Can any of the company-specific risk be diversified away by investing in both Karmarts Public and Samart Public 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 Karmarts Public and Samart Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Karmarts Public and Samart Public, you can compare the effects of market volatilities on Karmarts Public and Samart Public 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 Karmarts Public with a short position of Samart Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karmarts Public and Samart Public.

Diversification Opportunities for Karmarts Public and Samart Public

-0.47

Correlation Coefficient

Karmarts Public  Samart Public

Very good diversification

The 3 months correlation between Karmarts and Samart is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Karmarts Public and Samart Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samart Public and Karmarts Public 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 Karmarts Public are associated (or correlated) with Samart Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samart Public has no effect on the direction of Karmarts Public i.e., Karmarts Public and Samart Public go up and down completely randomly.

Pair Corralation between Karmarts Public and Samart Public

Assuming the 90 days trading horizon Karmarts Public is expected to generate 2.83 times less return on investment than Samart Public. In addition to that, Karmarts Public is 1.55 times more volatile than Samart Public. It trades about 0.01 of its total potential returns per unit of risk. Samart Public is currently generating about 0.06 per unit of volatility. If you would invest  690.00  in Samart Public on September 13, 2024 and sell it today you would earn a total of  40.00  from holding Samart Public or generate 5.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Karmarts Public  vs.  Samart Public

Karmarts Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Karmarts Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Karmarts Public is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Samart Public

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Samart Public are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting primary indicators, Samart Public may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Karmarts Public and Samart Public

The main advantage of trading using opposite Karmarts Public and Samart Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karmarts Public position performs unexpectedly, Samart Public 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 Samart Public will offset losses from the drop in Samart Public's long position.

The idea behind Karmarts Public and Samart Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.