Correlation Between Knife River and Tidal ETF
Can any of the company-specific risk be diversified away by investing in both Knife River and Tidal ETF 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 Knife River and Tidal ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Tidal ETF Trust, you can compare the effects of market volatilities on Knife River and Tidal ETF 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 Knife River with a short position of Tidal ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Tidal ETF.
Diversification Opportunities for Knife River and Tidal ETF
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knife and Tidal is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust and Knife River 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 Knife River are associated (or correlated) with Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of Knife River i.e., Knife River and Tidal ETF go up and down completely randomly.
Pair Corralation between Knife River and Tidal ETF
Considering the 90-day investment horizon Knife River is expected to generate 3.91 times more return on investment than Tidal ETF. However, Knife River is 3.91 times more volatile than Tidal ETF Trust. It trades about 0.11 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about 0.12 per unit of risk. If you would invest 9,641 in Knife River on August 30, 2024 and sell it today you would earn a total of 634.00 from holding Knife River or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. Tidal ETF Trust
Performance |
| Timeline |
| Knife River |
| Tidal ETF Trust |
Knife River and Tidal ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Tidal ETF
The main advantage of trading using opposite Knife River and Tidal ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, Tidal ETF 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 Tidal ETF will offset losses from the drop in Tidal ETF's long position.| Knife River vs. Cemex SAB de | Knife River vs. Boise Cascad Llc | Knife River vs. CRH PLC ADR | Knife River vs. Eagle Materials |
| Tidal ETF vs. JPMorgan BetaBuilders International | Tidal ETF vs. JPMorgan Core Plus | Tidal ETF vs. JPMorgan BetaBuilders Canada | Tidal ETF vs. JPMorgan Emerging Markets |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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