Correlation Between Knife River and ETRACS Quarterly
Can any of the company-specific risk be diversified away by investing in both Knife River and ETRACS Quarterly 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 ETRACS Quarterly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and ETRACS Quarterly Pay, you can compare the effects of market volatilities on Knife River and ETRACS Quarterly 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 ETRACS Quarterly. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and ETRACS Quarterly.
Diversification Opportunities for Knife River and ETRACS Quarterly
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Knife and ETRACS is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and ETRACS Quarterly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Quarterly Pay 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 ETRACS Quarterly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Quarterly Pay has no effect on the direction of Knife River i.e., Knife River and ETRACS Quarterly go up and down completely randomly.
Pair Corralation between Knife River and ETRACS Quarterly
Considering the 90-day investment horizon Knife River is expected to generate 1.7 times more return on investment than ETRACS Quarterly. However, Knife River is 1.7 times more volatile than ETRACS Quarterly Pay. It trades about 0.11 of its potential returns per unit of risk. ETRACS Quarterly Pay is currently generating about 0.11 per unit of risk. If you would invest 3,551 in Knife River on November 27, 2024 and sell it today you would earn a total of 5,722 from holding Knife River or generate 161.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 92.57% |
| Values | Daily Returns |
Knife River vs. ETRACS Quarterly Pay
Performance |
| Timeline |
| Knife River |
| ETRACS Quarterly Pay |
Knife River and ETRACS Quarterly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and ETRACS Quarterly
The main advantage of trading using opposite Knife River and ETRACS Quarterly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, ETRACS Quarterly 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 ETRACS Quarterly will offset losses from the drop in ETRACS Quarterly's long position.| Knife River vs. Franklin Street Properties | Knife River vs. NL Industries | Knife River vs. Eddy Smart Home | Knife River vs. Alto Ingredients |
| ETRACS Quarterly vs. ETRACS Quarterly Pay | ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. UBS AG London |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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