Correlation Between Knight Club and Bless Asset
Can any of the company-specific risk be diversified away by investing in both Knight Club and Bless Asset 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 Bless Asset 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 Bless Asset Group, you can compare the effects of market volatilities on Knight Club and Bless Asset 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 Bless Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Club and Bless Asset.
Diversification Opportunities for Knight Club and Bless Asset
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Knight and Bless is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Knight Club Capital and Bless Asset Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bless Asset Group 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 Bless Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bless Asset Group has no effect on the direction of Knight Club i.e., Knight Club and Bless Asset go up and down completely randomly.
Pair Corralation between Knight Club and Bless Asset
Assuming the 90 days trading horizon Knight Club Capital is expected to under-perform the Bless Asset. But the stock apears to be less risky and, when comparing its historical volatility, Knight Club Capital is 1.18 times less risky than Bless Asset. The stock trades about -0.58 of its potential returns per unit of risk. The Bless Asset Group is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 38.00 in Bless Asset Group on September 12, 2024 and sell it today you would lose (2.00) from holding Bless Asset Group or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Club Capital vs. Bless Asset Group
Performance |
| Timeline |
| Knight Club Capital |
| Bless Asset Group |
Knight Club and Bless Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Club and Bless Asset
The main advantage of trading using opposite Knight Club and Bless Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Club position performs unexpectedly, Bless Asset 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 Bless Asset will offset losses from the drop in Bless Asset's long position.| Knight Club vs. Jay Mart Public | Knight Club vs. Bioscience Animal Health | Knight Club vs. KCE Electronics Public | Knight Club vs. Sabuy Technology Public |
| Bless Asset vs. Chamni Eye PCL | Bless Asset vs. Bioscience Animal Health | Bless Asset vs. CAZ Public | Bless Asset vs. Chewathai 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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