Correlation Between Knife River and ManhattanLimited
Can any of the company-specific risk be diversified away by investing in both Knife River and ManhattanLimited 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 ManhattanLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Manhattan Limited, you can compare the effects of market volatilities on Knife River and ManhattanLimited 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 ManhattanLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and ManhattanLimited.
Diversification Opportunities for Knife River and ManhattanLimited
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knife and ManhattanLimited is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Manhattan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Limited 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 ManhattanLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Limited has no effect on the direction of Knife River i.e., Knife River and ManhattanLimited go up and down completely randomly.
Pair Corralation between Knife River and ManhattanLimited
Considering the 90-day investment horizon Knife River is expected to generate 0.58 times more return on investment than ManhattanLimited. However, Knife River is 1.74 times less risky than ManhattanLimited. It trades about 0.14 of its potential returns per unit of risk. Manhattan Limited is currently generating about -0.3 per unit of risk. If you would invest 9,575 in Knife River on August 29, 2024 and sell it today you would earn a total of 883.00 from holding Knife River or generate 9.22% 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. Manhattan Limited
Performance |
| Timeline |
| Knife River |
| Manhattan Limited |
Knife River and ManhattanLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and ManhattanLimited
The main advantage of trading using opposite Knife River and ManhattanLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, ManhattanLimited 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 ManhattanLimited will offset losses from the drop in ManhattanLimited'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 |
| ManhattanLimited vs. Morningstar Unconstrained Allocation | ManhattanLimited vs. High Yield Municipal Fund | ManhattanLimited vs. Knife River | ManhattanLimited vs. Klckner Co SE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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