Correlation Between Nexalin Technology and Karat Packaging

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

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

Diversification Opportunities for Nexalin Technology and Karat Packaging

-0.12

Correlation Coefficient

Nexalin Technology  Karat Packaging

Good diversification

The 3 months correlation between Nexalin and Karat is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Nexalin Technology and Karat Packaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karat Packaging and Nexalin Technology 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 Nexalin Technology 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 Nexalin Technology i.e., Nexalin Technology and Karat Packaging go up and down completely randomly.

Pair Corralation between Nexalin Technology and Karat Packaging

Considering the 90-day investment horizon Nexalin Technology is expected to under-perform the Karat Packaging. In addition to that, Nexalin Technology is 1.39 times more volatile than Karat Packaging. It trades about -0.09 of its total potential returns per unit of risk. Karat Packaging is currently generating about 0.02 per unit of volatility. If you would invest  2,609  in Karat Packaging on May 6, 2025 and sell it today you would earn a total of  35.00  from holding Karat Packaging or generate 1.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Nexalin Technology  vs.  Karat Packaging

Nexalin Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nexalin Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Karat Packaging

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Karat Packaging are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Karat Packaging is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nexalin Technology and Karat Packaging

The main advantage of trading using opposite Nexalin Technology and Karat Packaging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexalin Technology 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 Nexalin Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.