Correlation Between KNOT Offshore and Ambev SA
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Ambev SA 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 KNOT Offshore and Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KNOT Offshore Partners and Ambev SA ADR, you can compare the effects of market volatilities on KNOT Offshore and Ambev SA 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 KNOT Offshore with a short position of Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Ambev SA.
Diversification Opportunities for KNOT Offshore and Ambev SA
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KNOT and Ambev is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Ambev SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA ADR and KNOT Offshore 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 KNOT Offshore Partners are associated (or correlated) with Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA ADR has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Ambev SA go up and down completely randomly.
Pair Corralation between KNOT Offshore and Ambev SA
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the Ambev SA. In addition to that, KNOT Offshore is 1.03 times more volatile than Ambev SA ADR. It trades about -0.14 of its total potential returns per unit of risk. Ambev SA ADR is currently generating about 0.04 per unit of volatility. If you would invest 183.00 in Ambev SA ADR on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Ambev SA ADR or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Ambev SA ADR
Performance |
| Timeline |
| KNOT Offshore Partners |
| Ambev SA ADR |
KNOT Offshore and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Ambev SA
The main advantage of trading using opposite KNOT Offshore and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA's long position.| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
| Ambev SA vs. Fomento Economico Mexicano | Ambev SA vs. Boston Beer | Ambev SA vs. Carlsberg AS | Ambev SA vs. Compania Cervecerias Unidas |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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