Correlation Between KNOT Offshore and Grocery Outlet
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Grocery Outlet 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 Grocery Outlet 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 Grocery Outlet Holding, you can compare the effects of market volatilities on KNOT Offshore and Grocery Outlet 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 Grocery Outlet. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Grocery Outlet.
Diversification Opportunities for KNOT Offshore and Grocery Outlet
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between KNOT and Grocery is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Grocery Outlet Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grocery Outlet Holding 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 Grocery Outlet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grocery Outlet Holding has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Grocery Outlet go up and down completely randomly.
Pair Corralation between KNOT Offshore and Grocery Outlet
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 0.83 times more return on investment than Grocery Outlet. However, KNOT Offshore Partners is 1.2 times less risky than Grocery Outlet. It trades about 0.01 of its potential returns per unit of risk. Grocery Outlet Holding is currently generating about -0.04 per unit of risk. If you would invest 565.00 in KNOT Offshore Partners on November 3, 2024 and sell it today you would lose (15.00) from holding KNOT Offshore Partners or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Grocery Outlet Holding
Performance |
| Timeline |
| KNOT Offshore Partners |
| Grocery Outlet Holding |
KNOT Offshore and Grocery Outlet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Grocery Outlet
The main advantage of trading using opposite KNOT Offshore and Grocery Outlet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Grocery Outlet 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 Grocery Outlet will offset losses from the drop in Grocery Outlet'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 |
| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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