Correlation Between KNOT Offshore and Helmerich
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Helmerich 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 Helmerich 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 Helmerich and Payne, you can compare the effects of market volatilities on KNOT Offshore and Helmerich 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 Helmerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Helmerich.
Diversification Opportunities for KNOT Offshore and Helmerich
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KNOT and Helmerich is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Helmerich and Payne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helmerich and Payne 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 Helmerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helmerich and Payne has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Helmerich go up and down completely randomly.
Pair Corralation between KNOT Offshore and Helmerich
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the Helmerich. But the stock apears to be less risky and, when comparing its historical volatility, KNOT Offshore Partners is 1.57 times less risky than Helmerich. The stock trades about -0.1 of its potential returns per unit of risk. The Helmerich and Payne is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,335 in Helmerich and Payne on September 1, 2024 and sell it today you would earn a total of 128.00 from holding Helmerich and Payne or generate 3.84% 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. Helmerich and Payne
Performance |
| Timeline |
| KNOT Offshore Partners |
| Helmerich and Payne |
KNOT Offshore and Helmerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Helmerich
The main advantage of trading using opposite KNOT Offshore and Helmerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Helmerich 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 Helmerich will offset losses from the drop in Helmerich'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 |
| Helmerich vs. Nabors Industries | Helmerich vs. Precision Drilling | Helmerich vs. Seadrill Limited | Helmerich vs. Patterson UTI Energy |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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