Correlation Between Knife River and First Physicians
Can any of the company-specific risk be diversified away by investing in both Knife River and First Physicians 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 First Physicians into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and First Physicians Capital, you can compare the effects of market volatilities on Knife River and First Physicians 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 First Physicians. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and First Physicians.
Diversification Opportunities for Knife River and First Physicians
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Knife and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and First Physicians Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Physicians Capital 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 First Physicians. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Physicians Capital has no effect on the direction of Knife River i.e., Knife River and First Physicians go up and down completely randomly.
Pair Corralation between Knife River and First Physicians
If you would invest 7,171 in Knife River on August 23, 2024 and sell it today you would earn a total of 2,659 from holding Knife River or generate 37.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Knife River vs. First Physicians Capital
Performance |
| Timeline |
| Knife River |
| First Physicians Capital |
Knife River and First Physicians Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and First Physicians
The main advantage of trading using opposite Knife River and First Physicians positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, First Physicians 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 First Physicians will offset losses from the drop in First Physicians' 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 |
| First Physicians vs. ABIVAX Socit Anonyme | First Physicians vs. SCOR PK | First Physicians vs. HUMANA INC | First Physicians vs. Aquagold International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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