Correlation Between Knights Of and Kngt Clb
Can any of the company-specific risk be diversified away by investing in both Knights Of and Kngt Clb 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 Knights Of and Kngt Clb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knights Of Columbus and Kngt Clb Larg, you can compare the effects of market volatilities on Knights Of and Kngt Clb 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 Knights Of with a short position of Kngt Clb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knights Of and Kngt Clb.
Diversification Opportunities for Knights Of and Kngt Clb
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Knights and Kngt is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Knights Of Columbus and Kngt Clb Larg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kngt Clb Larg and Knights Of 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 Knights Of Columbus are associated (or correlated) with Kngt Clb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kngt Clb Larg has no effect on the direction of Knights Of i.e., Knights Of and Kngt Clb go up and down completely randomly.
Pair Corralation between Knights Of and Kngt Clb
Assuming the 90 days horizon Knights Of is expected to generate 2.16 times less return on investment than Kngt Clb. But when comparing it to its historical volatility, Knights Of Columbus is 3.18 times less risky than Kngt Clb. It trades about 0.17 of its potential returns per unit of risk. Kngt Clb Larg is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,442 in Kngt Clb Larg on August 31, 2024 and sell it today you would earn a total of 674.00 from holding Kngt Clb Larg or generate 46.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knights Of Columbus vs. Kngt Clb Larg
Performance |
| Timeline |
| Knights Of Columbus |
| Kngt Clb Larg |
Knights Of and Kngt Clb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knights Of and Kngt Clb
The main advantage of trading using opposite Knights Of and Kngt Clb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knights Of position performs unexpectedly, Kngt Clb 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 Kngt Clb will offset losses from the drop in Kngt Clb's long position.| Knights Of vs. Aqr Long Short Equity | Knights Of vs. Diamond Hill Long Short | Knights Of vs. Diamond Hill Long Short | Knights Of vs. Diamond Hill Long Short |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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