Correlation Between Klckner Co and Knife River
Can any of the company-specific risk be diversified away by investing in both Klckner Co and Knife River 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 Klckner Co and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Knife River, you can compare the effects of market volatilities on Klckner Co and Knife River 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 Klckner Co with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Knife River.
Diversification Opportunities for Klckner Co and Knife River
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Klckner and Knife is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and Klckner Co 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 Klckner Co SE are associated (or correlated) with Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Klckner Co i.e., Klckner Co and Knife River go up and down completely randomly.
Pair Corralation between Klckner Co and Knife River
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Knife River. In addition to that, Klckner Co is 1.53 times more volatile than Knife River. It trades about -0.03 of its total potential returns per unit of risk. Knife River is currently generating about 0.13 per unit of volatility. If you would invest 3,551 in Knife River on August 24, 2024 and sell it today you would earn a total of 6,501 from holding Knife River or generate 183.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.23% |
| Values | Daily Returns |
Klckner Co SE vs. Knife River
Performance |
| Timeline |
| Klckner Co SE |
| Knife River |
Klckner Co and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Knife River
The main advantage of trading using opposite Klckner Co and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| Klckner Co vs. Cleveland Cliffs | Klckner Co vs. Nucor Corp | Klckner Co vs. Steel Dynamics | Klckner Co vs. ArcelorMittal SA ADR |
| Knife River vs. MGIC Investment Corp | Knife River vs. Western Asset Investment | Knife River vs. Guangdong Investment Limited | Knife River vs. Vera Bradley |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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