Correlation Between Karat Packaging and Meet Kevin

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

By analyzing existing cross correlation between Karat Packaging and The Meet Kevin, you can compare the effects of market volatilities on Karat Packaging and Meet Kevin 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 Meet Kevin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karat Packaging and Meet Kevin.

Diversification Opportunities for Karat Packaging and Meet Kevin

-0.27

Correlation Coefficient

Karat Packaging  Meet Kevin

Very good diversification

The 3 months correlation between Karat and Meet is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Karat Packaging and The Meet Kevin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meet Kevin 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 Meet Kevin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meet Kevin has no effect on the direction of Karat Packaging i.e., Karat Packaging and Meet Kevin go up and down completely randomly.

Pair Corralation between Karat Packaging and Meet Kevin

Considering the 90-day investment horizon Karat Packaging is expected to under-perform the Meet Kevin. In addition to that, Karat Packaging is 1.6 times more volatile than The Meet Kevin. It trades about -0.05 of its total potential returns per unit of risk. The Meet Kevin is currently generating about -0.01 per unit of volatility. If you would invest  2,630  in The Meet Kevin on December 26, 2024 and sell it today you would lose (20.00) from holding The Meet Kevin or give up 0.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	73.33%
Values	Daily Returns

Karat Packaging  vs.  The Meet Kevin

Karat Packaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Karat Packaging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Meet Kevin

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Meet Kevin has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Meet Kevin is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Karat Packaging and Meet Kevin

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

The idea behind Karat Packaging and The Meet Kevin 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.