Correlation Between Knowles and SCIENCE IN
Can any of the company-specific risk be diversified away by investing in both Knowles and SCIENCE IN 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 Knowles and SCIENCE IN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles and SCIENCE IN SPORT, you can compare the effects of market volatilities on Knowles and SCIENCE IN 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 Knowles with a short position of SCIENCE IN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles and SCIENCE IN.
Diversification Opportunities for Knowles and SCIENCE IN
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knowles and SCIENCE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Knowles and SCIENCE IN SPORT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCIENCE IN SPORT and Knowles 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 Knowles are associated (or correlated) with SCIENCE IN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCIENCE IN SPORT has no effect on the direction of Knowles i.e., Knowles and SCIENCE IN go up and down completely randomly.
Pair Corralation between Knowles and SCIENCE IN
Assuming the 90 days horizon Knowles is expected to generate 0.33 times more return on investment than SCIENCE IN. However, Knowles is 3.01 times less risky than SCIENCE IN. It trades about 0.21 of its potential returns per unit of risk. SCIENCE IN SPORT is currently generating about 0.02 per unit of risk. If you would invest 1,740 in Knowles on September 15, 2024 and sell it today you would earn a total of 130.00 from holding Knowles or generate 7.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Knowles vs. SCIENCE IN SPORT
Performance |
| Timeline |
| Knowles |
| SCIENCE IN SPORT |
Knowles and SCIENCE IN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles and SCIENCE IN
The main advantage of trading using opposite Knowles and SCIENCE IN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles position performs unexpectedly, SCIENCE IN 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 SCIENCE IN will offset losses from the drop in SCIENCE IN's long position.| Knowles vs. SCIENCE IN SPORT | Knowles vs. Strategic Investments AS | Knowles vs. EAT WELL INVESTMENT | Knowles vs. Big 5 Sporting |
| SCIENCE IN vs. Hormel Foods | SCIENCE IN vs. Superior Plus Corp | SCIENCE IN vs. SIVERS SEMICONDUCTORS AB | SCIENCE IN vs. NorAm Drilling AS |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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