Correlation Between Benchmark Botanics and Knight Therapeutics
Can any of the company-specific risk be diversified away by investing in both Benchmark Botanics and Knight Therapeutics 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 Benchmark Botanics and Knight Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Benchmark Botanics and Knight Therapeutics, you can compare the effects of market volatilities on Benchmark Botanics and Knight Therapeutics 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 Benchmark Botanics with a short position of Knight Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Benchmark Botanics and Knight Therapeutics.
Diversification Opportunities for Benchmark Botanics and Knight Therapeutics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Benchmark and Knight is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Botanics and Knight Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knight Therapeutics and Benchmark Botanics 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 Benchmark Botanics are associated (or correlated) with Knight Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knight Therapeutics has no effect on the direction of Benchmark Botanics i.e., Benchmark Botanics and Knight Therapeutics go up and down completely randomly.
Pair Corralation between Benchmark Botanics and Knight Therapeutics
Assuming the 90 days horizon Benchmark Botanics is expected to generate 17.85 times more return on investment than Knight Therapeutics. However, Benchmark Botanics is 17.85 times more volatile than Knight Therapeutics. It trades about 0.04 of its potential returns per unit of risk. Knight Therapeutics is currently generating about 0.0 per unit of risk. If you would invest 1.00 in Benchmark Botanics on August 29, 2024 and sell it today you would lose (0.66) from holding Benchmark Botanics or give up 66.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Benchmark Botanics vs. Knight Therapeutics
Performance |
| Timeline |
| Benchmark Botanics |
| Knight Therapeutics |
Benchmark Botanics and Knight Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Benchmark Botanics and Knight Therapeutics
The main advantage of trading using opposite Benchmark Botanics and Knight Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Botanics position performs unexpectedly, Knight Therapeutics 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 Knight Therapeutics will offset losses from the drop in Knight Therapeutics' long position.| Benchmark Botanics vs. Green Cures Botanical | Benchmark Botanics vs. Cann American Corp | Benchmark Botanics vs. Rimrock Gold Corp | Benchmark Botanics vs. Galexxy Holdings |
| Knight Therapeutics vs. Crescita Therapeutics | Knight Therapeutics vs. Cannara Biotech | Knight Therapeutics vs. Lowell Farms | Knight Therapeutics vs. Aion Therapeutic |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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