Correlation Between Knight Therapeutics and Secure Energy
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics and Secure Energy 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 Secure Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and Secure Energy Services, you can compare the effects of market volatilities on Knight Therapeutics and Secure Energy 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 Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and Secure Energy.
Diversification Opportunities for Knight Therapeutics and Secure Energy
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Knight and Secure is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services 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 Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Knight Therapeutics i.e., Knight Therapeutics and Secure Energy go up and down completely randomly.
Pair Corralation between Knight Therapeutics and Secure Energy
Assuming the 90 days trading horizon Knight Therapeutics is expected to generate 17.95 times less return on investment than Secure Energy. But when comparing it to its historical volatility, Knight Therapeutics is 1.32 times less risky than Secure Energy. It trades about 0.01 of its potential returns per unit of risk. Secure Energy Services is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 639.00 in Secure Energy Services on August 28, 2024 and sell it today you would earn a total of 956.00 from holding Secure Energy Services or generate 149.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Therapeutics vs. Secure Energy Services
Performance |
| Timeline |
| Knight Therapeutics |
| Secure Energy Services |
Knight Therapeutics and Secure Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Therapeutics and Secure Energy
The main advantage of trading using opposite Knight Therapeutics and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics position performs unexpectedly, Secure Energy 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 Secure Energy will offset losses from the drop in Secure Energy'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 |
| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
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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