Correlation Between Knowles Cor and ClearSign Combustion
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and ClearSign Combustion 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 Knowles Cor and ClearSign Combustion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and ClearSign Combustion, you can compare the effects of market volatilities on Knowles Cor and ClearSign Combustion 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 Knowles Cor with a short position of ClearSign Combustion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and ClearSign Combustion.
Diversification Opportunities for Knowles Cor and ClearSign Combustion
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Knowles and ClearSign is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and ClearSign Combustion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ClearSign Combustion and Knowles Cor 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 Knowles Cor are associated (or correlated) with ClearSign Combustion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ClearSign Combustion has no effect on the direction of Knowles Cor i.e., Knowles Cor and ClearSign Combustion go up and down completely randomly.
Pair Corralation between Knowles Cor and ClearSign Combustion
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 3.6 times less return on investment than ClearSign Combustion. But when comparing it to its historical volatility, Knowles Cor is 2.73 times less risky than ClearSign Combustion. It trades about 0.06 of its potential returns per unit of risk. ClearSign Combustion is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 78.00 in ClearSign Combustion on September 3, 2024 and sell it today you would earn a total of 39.00 from holding ClearSign Combustion or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. ClearSign Combustion
Performance |
| Timeline |
| Knowles Cor |
| ClearSign Combustion |
Knowles Cor and ClearSign Combustion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and ClearSign Combustion
The main advantage of trading using opposite Knowles Cor and ClearSign Combustion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, ClearSign Combustion 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 ClearSign Combustion will offset losses from the drop in ClearSign Combustion's long position.| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
| ClearSign Combustion vs. Urban One Class | ClearSign Combustion vs. Broadway Financial | ClearSign Combustion vs. Ideal Power | ClearSign Combustion vs. Carver Bancorp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |