Correlation Between Knife River and DBX ETF
Can any of the company-specific risk be diversified away by investing in both Knife River and DBX 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 DBX 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 DBX ETF Trust, you can compare the effects of market volatilities on Knife River and DBX 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 DBX ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and DBX ETF.
Diversification Opportunities for Knife River and DBX ETF
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Knife and DBX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and DBX ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBX 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 DBX ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBX ETF Trust has no effect on the direction of Knife River i.e., Knife River and DBX ETF go up and down completely randomly.
Pair Corralation between Knife River and DBX ETF
Considering the 90-day investment horizon Knife River is expected to generate 4.71 times more return on investment than DBX ETF. However, Knife River is 4.71 times more volatile than DBX ETF Trust. It trades about 0.11 of its potential returns per unit of risk. DBX ETF Trust is currently generating about 0.45 per unit of risk. If you would invest 9,732 in Knife River on September 1, 2024 and sell it today you would earn a total of 618.00 from holding Knife River or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. DBX ETF Trust
Performance |
| Timeline |
| Knife River |
| DBX ETF Trust |
Knife River and DBX ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and DBX ETF
The main advantage of trading using opposite Knife River and DBX ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, DBX 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 DBX ETF will offset losses from the drop in DBX ETF's long position.| Knife River vs. Park Hotels Resorts | Knife River vs. The Wendys Co | Knife River vs. Dave Busters Entertainment | Knife River vs. Playa Hotels Resorts |
| DBX ETF vs. SPDR MSCI USA | DBX ETF vs. American Century STOXX | DBX ETF vs. Hartford Multifactor Equity | DBX ETF vs. PIMCO RAFI Dynamic |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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