Correlation Between Knife River and EA Series
Can any of the company-specific risk be diversified away by investing in both Knife River and EA Series 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 EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and EA Series Trust, you can compare the effects of market volatilities on Knife River and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and EA Series.
Diversification Opportunities for Knife River and EA Series
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Knife and STRV is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Knife River i.e., Knife River and EA Series go up and down completely randomly.
Pair Corralation between Knife River and EA Series
Considering the 90-day investment horizon Knife River is expected to generate 2.74 times more return on investment than EA Series. However, Knife River is 2.74 times more volatile than EA Series Trust. It trades about 0.13 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.11 per unit of risk. If you would invest 3,551 in Knife River on August 26, 2024 and sell it today you would earn a total of 6,714 from holding Knife River or generate 189.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 75.86% |
| Values | Daily Returns |
Knife River vs. EA Series Trust
Performance |
| Timeline |
| Knife River |
| EA Series Trust |
Knife River and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and EA Series
The main advantage of trading using opposite Knife River and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' 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 |
| EA Series vs. Morningstar Unconstrained Allocation | EA Series vs. High Yield Municipal Fund | EA Series vs. Via Renewables | EA Series vs. Knife River |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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