Correlation Between First Physicians and Knife River
Can any of the company-specific risk be diversified away by investing in both First Physicians 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 First Physicians and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Physicians Capital and Knife River, you can compare the effects of market volatilities on First Physicians 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 First Physicians with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Physicians and Knife River.
Diversification Opportunities for First Physicians and Knife River
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Knife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Physicians Capital and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and First Physicians 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 First Physicians Capital 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 First Physicians i.e., First Physicians and Knife River go up and down completely randomly.
Pair Corralation between First Physicians and Knife River
If you would invest 7,171 in Knife River on August 23, 2024 and sell it today you would earn a total of 2,659 from holding Knife River or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
First Physicians Capital vs. Knife River
Performance |
| Timeline |
| First Physicians Capital |
| Knife River |
First Physicians and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Physicians and Knife River
The main advantage of trading using opposite First Physicians and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Physicians 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.| First Physicians vs. ABIVAX Socit Anonyme | First Physicians vs. SCOR PK | First Physicians vs. HUMANA INC | First Physicians vs. Aquagold International |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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