Correlation Between Knight Therapeutics and Grey Cloak
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics and Grey Cloak 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 Therapeutics and Grey Cloak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and Grey Cloak Tech, you can compare the effects of market volatilities on Knight Therapeutics and Grey Cloak 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 Therapeutics with a short position of Grey Cloak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and Grey Cloak.
Diversification Opportunities for Knight Therapeutics and Grey Cloak
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Knight and Grey is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics and Grey Cloak Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grey Cloak Tech and Knight Therapeutics 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 Therapeutics are associated (or correlated) with Grey Cloak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grey Cloak Tech has no effect on the direction of Knight Therapeutics i.e., Knight Therapeutics and Grey Cloak go up and down completely randomly.
Pair Corralation between Knight Therapeutics and Grey Cloak
Assuming the 90 days horizon Knight Therapeutics is expected to generate 19.6 times less return on investment than Grey Cloak. But when comparing it to its historical volatility, Knight Therapeutics is 11.01 times less risky than Grey Cloak. It trades about 0.03 of its potential returns per unit of risk. Grey Cloak Tech is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 570.00 in Grey Cloak Tech on September 12, 2024 and sell it today you would lose (245.00) from holding Grey Cloak Tech or give up 42.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 83.94% |
| Values | Daily Returns |
Knight Therapeutics vs. Grey Cloak Tech
Performance |
| Timeline |
| Knight Therapeutics |
| Grey Cloak Tech |
Knight Therapeutics and Grey Cloak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Therapeutics and Grey Cloak
The main advantage of trading using opposite Knight Therapeutics and Grey Cloak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics position performs unexpectedly, Grey Cloak 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 Grey Cloak will offset losses from the drop in Grey Cloak's long position.| Knight Therapeutics vs. Grey Cloak Tech | Knight Therapeutics vs. CuraScientific Corp | Knight Therapeutics vs. Love Hemp Group | Knight Therapeutics vs. Greater Cannabis |
| Grey Cloak vs. ManifestSeven Holdings | Grey Cloak vs. Pure Harvest Cannabis | Grey Cloak vs. Ionic Brands Corp | Grey Cloak vs. CuraScientific Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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