Correlation Between Millennium Group and Karat Packaging

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

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

Diversification Opportunities for Millennium Group and Karat Packaging

-0.03

Correlation Coefficient

Millennium Group  Karat Packaging

Good diversification

The 3 months correlation between Millennium and Karat is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Millennium Group International and Karat Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karat Packaging and Millennium Group 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 Millennium Group International are associated (or correlated) with Karat Packaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karat Packaging has no effect on the direction of Millennium Group i.e., Millennium Group and Karat Packaging go up and down completely randomly.

Pair Corralation between Millennium Group and Karat Packaging

Given the investment horizon of 90 days Millennium Group International is expected to under-perform the Karat Packaging. In addition to that, Millennium Group is 3.91 times more volatile than Karat Packaging. It trades about -0.05 of its total potential returns per unit of risk. Karat Packaging is currently generating about -0.06 per unit of volatility. If you would invest  2,949  in Karat Packaging on December 29, 2024 and sell it today you would lose (224.00) from holding Karat Packaging or give up 7.6% of portfolio value over 90 days.

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

Millennium Group International  vs.  Karat Packaging

Millennium Group Int

Risk-Adjusted Performance

Very Weak

Over the last 90 days Millennium Group International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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.

Pair Trading with Millennium Group and Karat Packaging

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

The idea behind Millennium Group International and Karat Packaging 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.