Correlation Between SPACE and Knife River
Can any of the company-specific risk be diversified away by investing in both SPACE 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 SPACE and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPACE and Knife River, you can compare the effects of market volatilities on SPACE 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 SPACE with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPACE and Knife River.
Diversification Opportunities for SPACE and Knife River
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SPACE and Knife is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SPACE and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and SPACE 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 SPACE 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 SPACE i.e., SPACE and Knife River go up and down completely randomly.
Pair Corralation between SPACE and Knife River
Assuming the 90 days horizon SPACE is expected to under-perform the Knife River. In addition to that, SPACE is 3.18 times more volatile than Knife River. It trades about -0.26 of its total potential returns per unit of risk. Knife River is currently generating about -0.05 per unit of volatility. If you would invest 10,488 in Knife River on November 18, 2024 and sell it today you would lose (283.00) from holding Knife River or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPACE vs. Knife River
Performance |
| Timeline |
| SPACE |
| Knife River |
SPACE and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPACE and Knife River
The main advantage of trading using opposite SPACE and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPACE 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.The idea behind SPACE and Knife River pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Knife River vs. Academy Sports Outdoors | Knife River vs. Lithia Motors | Knife River vs. Cedar Realty Trust | Knife River vs. Aegon NV ADR |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |