Correlation Between ANT and Knife River
Can any of the company-specific risk be diversified away by investing in both ANT and Knife River 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 ANT and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and Knife River, you can compare the effects of market volatilities on ANT and Knife River 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 ANT with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Knife River.
Diversification Opportunities for ANT and Knife River
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ANT and Knife is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ANT and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and ANT 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 ANT are associated (or correlated) with Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of ANT i.e., ANT and Knife River go up and down completely randomly.
Pair Corralation between ANT and Knife River
Assuming the 90 days trading horizon ANT is expected to generate 25.21 times more return on investment than Knife River. However, ANT is 25.21 times more volatile than Knife River. It trades about 0.1 of its potential returns per unit of risk. Knife River is currently generating about 0.13 per unit of risk. If you would invest 321.00 in ANT on October 20, 2024 and sell it today you would lose (174.00) from holding ANT or give up 54.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 72.33% |
| Values | Daily Returns |
ANT vs. Knife River
Performance |
| Timeline |
| ANT |
| Knife River |
ANT and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and Knife River
The main advantage of trading using opposite ANT and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.The idea behind ANT and Knife River 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.| Knife River vs. Waste Management | Knife River vs. BCE Inc | Knife River vs. US Global Investors | Knife River vs. Franklin Credit Management |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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