Correlation Between KNOT Offshore and Jacobs Solutions
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Jacobs Solutions 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 Jacobs Solutions 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 Jacobs Solutions, you can compare the effects of market volatilities on KNOT Offshore and Jacobs Solutions 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 Jacobs Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Jacobs Solutions.
Diversification Opportunities for KNOT Offshore and Jacobs Solutions
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KNOT and Jacobs is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Jacobs Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacobs Solutions 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 Jacobs Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacobs Solutions has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Jacobs Solutions go up and down completely randomly.
Pair Corralation between KNOT Offshore and Jacobs Solutions
Given the investment horizon of 90 days KNOT Offshore is expected to generate 1.93 times less return on investment than Jacobs Solutions. In addition to that, KNOT Offshore is 2.01 times more volatile than Jacobs Solutions. It trades about 0.01 of its total potential returns per unit of risk. Jacobs Solutions is currently generating about 0.06 per unit of volatility. If you would invest 10,246 in Jacobs Solutions on August 27, 2024 and sell it today you would earn a total of 3,684 from holding Jacobs Solutions or generate 35.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Jacobs Solutions
Performance |
| Timeline |
| KNOT Offshore Partners |
| Jacobs Solutions |
KNOT Offshore and Jacobs Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Jacobs Solutions
The main advantage of trading using opposite KNOT Offshore and Jacobs Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Jacobs Solutions 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 Jacobs Solutions will offset losses from the drop in Jacobs Solutions' 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 |
| Jacobs Solutions vs. Innovate Corp | Jacobs Solutions vs. Energy Services | Jacobs Solutions vs. Api Group Corp | Jacobs Solutions vs. Topbuild Corp |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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