Correlation Between Knight Therapeutics and Lion Electric
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics and Lion Electric 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 Knight Therapeutics and Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and Lion Electric Corp, you can compare the effects of market volatilities on Knight Therapeutics and Lion Electric 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 Knight Therapeutics with a short position of Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and Lion Electric.
Diversification Opportunities for Knight Therapeutics and Lion Electric
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knight and Lion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp and Knight Therapeutics 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 Knight Therapeutics are associated (or correlated) with Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of Knight Therapeutics i.e., Knight Therapeutics and Lion Electric go up and down completely randomly.
Pair Corralation between Knight Therapeutics and Lion Electric
Assuming the 90 days trading horizon Knight Therapeutics is expected to generate 0.35 times more return on investment than Lion Electric. However, Knight Therapeutics is 2.83 times less risky than Lion Electric. It trades about 0.03 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.13 per unit of risk. If you would invest 480.00 in Knight Therapeutics on August 26, 2024 and sell it today you would earn a total of 49.00 from holding Knight Therapeutics or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Therapeutics vs. Lion Electric Corp
Performance |
| Timeline |
| Knight Therapeutics |
| Lion Electric Corp |
Knight Therapeutics and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Therapeutics and Lion Electric
The main advantage of trading using opposite Knight Therapeutics and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| Knight Therapeutics vs. Stella Jones | Knight Therapeutics vs. Richelieu Hardware | Knight Therapeutics vs. Element Fleet Management | Knight Therapeutics vs. ECN Capital Corp |
| Lion Electric vs. Lion Electric Corp | Lion Electric vs. Alimentation Couchen Tard | Lion Electric vs. BRP Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |