Correlation Between CommScope Holding and Knowles Cor
Can any of the company-specific risk be diversified away by investing in both CommScope Holding and Knowles Cor 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 CommScope Holding and Knowles Cor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CommScope Holding Co and Knowles Cor, you can compare the effects of market volatilities on CommScope Holding and Knowles Cor 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 CommScope Holding with a short position of Knowles Cor. Check out your portfolio center. Please also check ongoing floating volatility patterns of CommScope Holding and Knowles Cor.
Diversification Opportunities for CommScope Holding and Knowles Cor
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CommScope and Knowles is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding CommScope Holding Co and Knowles Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles Cor and CommScope Holding 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 CommScope Holding Co are associated (or correlated) with Knowles Cor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles Cor has no effect on the direction of CommScope Holding i.e., CommScope Holding and Knowles Cor go up and down completely randomly.
Pair Corralation between CommScope Holding and Knowles Cor
Given the investment horizon of 90 days CommScope Holding Co is expected to under-perform the Knowles Cor. In addition to that, CommScope Holding is 2.89 times more volatile than Knowles Cor. It trades about -0.2 of its total potential returns per unit of risk. Knowles Cor is currently generating about 0.1 per unit of volatility. If you would invest 1,809 in Knowles Cor on August 27, 2024 and sell it today you would earn a total of 84.00 from holding Knowles Cor or generate 4.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CommScope Holding Co vs. Knowles Cor
Performance |
| Timeline |
| CommScope Holding |
| Knowles Cor |
CommScope Holding and Knowles Cor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CommScope Holding and Knowles Cor
The main advantage of trading using opposite CommScope Holding and Knowles Cor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CommScope Holding position performs unexpectedly, Knowles Cor 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 Knowles Cor will offset losses from the drop in Knowles Cor's long position.| CommScope Holding vs. Harmonic | CommScope Holding vs. NETGEAR | CommScope Holding vs. Comtech Telecommunications Corp | CommScope Holding vs. ADTRAN Inc |
| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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