Correlation Between Knight Club and Bioscience Animal
Can any of the company-specific risk be diversified away by investing in both Knight Club and Bioscience Animal 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 Club and Bioscience Animal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Club Capital and Bioscience Animal Health, you can compare the effects of market volatilities on Knight Club and Bioscience Animal 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 Club with a short position of Bioscience Animal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Club and Bioscience Animal.
Diversification Opportunities for Knight Club and Bioscience Animal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knight and Bioscience is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Knight Club Capital and Bioscience Animal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioscience Animal Health and Knight Club 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 Club Capital are associated (or correlated) with Bioscience Animal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioscience Animal Health has no effect on the direction of Knight Club i.e., Knight Club and Bioscience Animal go up and down completely randomly.
Pair Corralation between Knight Club and Bioscience Animal
Assuming the 90 days trading horizon Knight Club Capital is expected to under-perform the Bioscience Animal. But the stock apears to be less risky and, when comparing its historical volatility, Knight Club Capital is 1.07 times less risky than Bioscience Animal. The stock trades about -0.57 of its potential returns per unit of risk. The Bioscience Animal Health is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest 368.00 in Bioscience Animal Health on September 1, 2024 and sell it today you would lose (42.00) from holding Bioscience Animal Health or give up 11.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Knight Club Capital vs. Bioscience Animal Health
Performance |
| Timeline |
| Knight Club Capital |
| Bioscience Animal Health |
Knight Club and Bioscience Animal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Club and Bioscience Animal
The main advantage of trading using opposite Knight Club and Bioscience Animal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Club position performs unexpectedly, Bioscience Animal 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 Bioscience Animal will offset losses from the drop in Bioscience Animal's long position.| Knight Club vs. AP Public | Knight Club vs. TRC Construction Public | Knight Club vs. Bangkok Expressway and | Knight Club vs. Lohakit Metal Public |
| Bioscience Animal vs. Mega Lifesciences Public | Bioscience Animal vs. Com7 PCL | Bioscience Animal vs. Thai Union Group | Bioscience Animal vs. Jay Mart Public |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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