Correlation Between Integrated Drilling and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both Integrated Drilling and KNOT Offshore 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 Integrated Drilling and KNOT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integrated Drilling Equipment and KNOT Offshore Partners, you can compare the effects of market volatilities on Integrated Drilling and KNOT Offshore 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 Integrated Drilling with a short position of KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integrated Drilling and KNOT Offshore.
Diversification Opportunities for Integrated Drilling and KNOT Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Integrated and KNOT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Drilling Equipment and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners and Integrated Drilling 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 Integrated Drilling Equipment are associated (or correlated) with KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Integrated Drilling i.e., Integrated Drilling and KNOT Offshore go up and down completely randomly.
Pair Corralation between Integrated Drilling and KNOT Offshore
If you would invest 5.00 in Integrated Drilling Equipment on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Integrated Drilling Equipment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Integrated Drilling Equipment vs. KNOT Offshore Partners
Performance |
| Timeline |
| Integrated Drilling |
| KNOT Offshore Partners |
Integrated Drilling and KNOT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integrated Drilling and KNOT Offshore
The main advantage of trading using opposite Integrated Drilling and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integrated Drilling position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore's long position.| Integrated Drilling vs. Petroleo Brasileiro Petrobras | Integrated Drilling vs. Equinor ASA ADR | Integrated Drilling vs. Eni SpA ADR | Integrated Drilling vs. YPF Sociedad Anonima |
| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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