Correlation Between Knowles Cor and VerifyMe
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and VerifyMe 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 VerifyMe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and VerifyMe, you can compare the effects of market volatilities on Knowles Cor and VerifyMe 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 VerifyMe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and VerifyMe.
Diversification Opportunities for Knowles Cor and VerifyMe
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Knowles and VerifyMe is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and VerifyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VerifyMe 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 VerifyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VerifyMe has no effect on the direction of Knowles Cor i.e., Knowles Cor and VerifyMe go up and down completely randomly.
Pair Corralation between Knowles Cor and VerifyMe
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 0.27 times more return on investment than VerifyMe. However, Knowles Cor is 3.67 times less risky than VerifyMe. It trades about 0.23 of its potential returns per unit of risk. VerifyMe is currently generating about -0.25 per unit of risk. If you would invest 1,754 in Knowles Cor on September 2, 2024 and sell it today you would earn a total of 192.00 from holding Knowles Cor or generate 10.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. VerifyMe
Performance |
| Timeline |
| Knowles Cor |
| VerifyMe |
Knowles Cor and VerifyMe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and VerifyMe
The main advantage of trading using opposite Knowles Cor and VerifyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, VerifyMe 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 VerifyMe will offset losses from the drop in VerifyMe'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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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