Correlation Between FT Cboe and Knife River
Can any of the company-specific risk be diversified away by investing in both FT Cboe and Knife River 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 FT Cboe and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FT Cboe Vest and Knife River, you can compare the effects of market volatilities on FT Cboe and Knife River 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 FT Cboe with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of FT Cboe and Knife River.
Diversification Opportunities for FT Cboe and Knife River
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KNG and Knife is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FT Cboe Vest and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and FT Cboe 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 FT Cboe Vest are associated (or correlated) with Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of FT Cboe i.e., FT Cboe and Knife River go up and down completely randomly.
Pair Corralation between FT Cboe and Knife River
Considering the 90-day investment horizon FT Cboe Vest is expected to generate 0.31 times more return on investment than Knife River. However, FT Cboe Vest is 3.28 times less risky than Knife River. It trades about 0.22 of its potential returns per unit of risk. Knife River is currently generating about 0.06 per unit of risk. If you would invest 4,984 in FT Cboe Vest on November 4, 2024 and sell it today you would earn a total of 167.00 from holding FT Cboe Vest or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
FT Cboe Vest vs. Knife River
Performance |
| Timeline |
| FT Cboe Vest |
| Knife River |
FT Cboe and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FT Cboe and Knife River
The main advantage of trading using opposite FT Cboe and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FT Cboe position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| FT Cboe vs. Global X SP | FT Cboe vs. Global X Nasdaq | FT Cboe vs. First Trust BuyWrite | FT Cboe vs. Amplify CWP Enhanced |
| Knife River vs. RH | Knife River vs. Treasury Wine Estates | Knife River vs. Oatly Group AB | Knife River vs. Naked Wines plc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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