Correlation Between KNOT Offshore and FlexShopper
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and FlexShopper 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 FlexShopper 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 FlexShopper, you can compare the effects of market volatilities on KNOT Offshore and FlexShopper 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 FlexShopper. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and FlexShopper.
Diversification Opportunities for KNOT Offshore and FlexShopper
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KNOT and FlexShopper is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and FlexShopper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShopper 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 FlexShopper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShopper has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and FlexShopper go up and down completely randomly.
Pair Corralation between KNOT Offshore and FlexShopper
Given the investment horizon of 90 days KNOT Offshore is expected to generate 2.09 times less return on investment than FlexShopper. But when comparing it to its historical volatility, KNOT Offshore Partners is 1.85 times less risky than FlexShopper. It trades about 0.03 of its potential returns per unit of risk. FlexShopper is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 143.00 in FlexShopper on August 28, 2024 and sell it today you would earn a total of 34.00 from holding FlexShopper or generate 23.78% 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. FlexShopper
Performance |
| Timeline |
| KNOT Offshore Partners |
| FlexShopper |
KNOT Offshore and FlexShopper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and FlexShopper
The main advantage of trading using opposite KNOT Offshore and FlexShopper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, FlexShopper 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 FlexShopper will offset losses from the drop in FlexShopper'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 |
| FlexShopper vs. AZN Capital Corp | FlexShopper vs. Fortress Transportation and | FlexShopper vs. Ashtead Gro | FlexShopper vs. Alta Equipment Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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