Correlation Between US Global and Knife River
Can any of the company-specific risk be diversified away by investing in both US Global 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 US Global and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Global Investors and Knife River, you can compare the effects of market volatilities on US Global 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 US Global with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Global and Knife River.
Diversification Opportunities for US Global and Knife River
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GROW and Knife is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding US Global Investors and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and US Global 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 US Global Investors 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 US Global i.e., US Global and Knife River go up and down completely randomly.
Pair Corralation between US Global and Knife River
Given the investment horizon of 90 days US Global Investors is expected to under-perform the Knife River. But the stock apears to be less risky and, when comparing its historical volatility, US Global Investors is 1.73 times less risky than Knife River. The stock trades about -0.03 of its potential returns per unit of risk. The Knife River is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,310 in Knife River on October 20, 2024 and sell it today you would earn a total of 4,178 from holding Knife River or generate 66.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Global Investors vs. Knife River
Performance |
| Timeline |
| US Global Investors |
| Knife River |
US Global and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Global and Knife River
The main advantage of trading using opposite US Global and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Global 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.| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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