Correlation Between Knife River and Valens
Can any of the company-specific risk be diversified away by investing in both Knife River and Valens 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 Valens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Valens, you can compare the effects of market volatilities on Knife River and Valens 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 Valens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Valens.
Diversification Opportunities for Knife River and Valens
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Knife and Valens is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Valens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valens 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 Valens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valens has no effect on the direction of Knife River i.e., Knife River and Valens go up and down completely randomly.
Pair Corralation between Knife River and Valens
Considering the 90-day investment horizon Knife River is expected to generate 0.73 times more return on investment than Valens. However, Knife River is 1.37 times less risky than Valens. It trades about -0.13 of its potential returns per unit of risk. Valens is currently generating about -0.14 per unit of risk. If you would invest 9,997 in Knife River on November 27, 2024 and sell it today you would lose (724.00) from holding Knife River or give up 7.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. Valens
Performance |
| Timeline |
| Knife River |
| Valens |
Knife River and Valens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Valens
The main advantage of trading using opposite Knife River and Valens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, Valens 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 Valens will offset losses from the drop in Valens' long position.| Knife River vs. Franklin Street Properties | Knife River vs. NL Industries | Knife River vs. Eddy Smart Home | Knife River vs. Alto Ingredients |
| Valens vs. Wolfspeed | Valens vs. GSI Technology | Valens vs. Lattice Semiconductor | Valens vs. ON Semiconductor |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |