Correlation Between KNOT Offshore and Capital Clean
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Capital Clean 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 Capital Clean 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 Capital Clean Energy, you can compare the effects of market volatilities on KNOT Offshore and Capital Clean 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 Capital Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Capital Clean.
Diversification Opportunities for KNOT Offshore and Capital Clean
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KNOT and Capital is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Capital Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Clean Energy 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 Capital Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Clean Energy has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Capital Clean go up and down completely randomly.
Pair Corralation between KNOT Offshore and Capital Clean
Given the investment horizon of 90 days KNOT Offshore is expected to generate 1.24 times less return on investment than Capital Clean. In addition to that, KNOT Offshore is 1.4 times more volatile than Capital Clean Energy. It trades about 0.02 of its total potential returns per unit of risk. Capital Clean Energy is currently generating about 0.04 per unit of volatility. If you would invest 1,718 in Capital Clean Energy on August 24, 2024 and sell it today you would earn a total of 149.00 from holding Capital Clean Energy or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Capital Clean Energy
Performance |
| Timeline |
| KNOT Offshore Partners |
| Capital Clean Energy |
KNOT Offshore and Capital Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Capital Clean
The main advantage of trading using opposite KNOT Offshore and Capital Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Capital Clean 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 Capital Clean will offset losses from the drop in Capital Clean'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 |
| Capital Clean vs. Mattel Inc | Capital Clean vs. Playa Hotels Resorts | Capital Clean vs. Universal Display | Capital Clean vs. Relx PLC ADR |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |