Correlation Between Knowles Cor and Littelfuse
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and Littelfuse 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 Littelfuse into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Littelfuse, you can compare the effects of market volatilities on Knowles Cor and Littelfuse 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 Littelfuse. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Littelfuse.
Diversification Opportunities for Knowles Cor and Littelfuse
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Knowles and Littelfuse is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Littelfuse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Littelfuse 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 Littelfuse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Littelfuse has no effect on the direction of Knowles Cor i.e., Knowles Cor and Littelfuse go up and down completely randomly.
Pair Corralation between Knowles Cor and Littelfuse
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 1.03 times more return on investment than Littelfuse. However, Knowles Cor is 1.03 times more volatile than Littelfuse. It trades about 0.06 of its potential returns per unit of risk. Littelfuse is currently generating about 0.02 per unit of risk. If you would invest 1,604 in Knowles Cor on September 3, 2024 and sell it today you would earn a total of 411.00 from holding Knowles Cor or generate 25.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. Littelfuse
Performance |
| Timeline |
| Knowles Cor |
| Littelfuse |
Knowles Cor and Littelfuse Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and Littelfuse
The main advantage of trading using opposite Knowles Cor and Littelfuse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, Littelfuse 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 Littelfuse will offset losses from the drop in Littelfuse'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 |
| Littelfuse vs. Plexus Corp | Littelfuse vs. Celestica | Littelfuse vs. Benchmark Electronics | Littelfuse vs. Flex |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |