Correlation Between KNOT Offshore and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Lincoln Educational 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 Lincoln Educational 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 Lincoln Educational Services, you can compare the effects of market volatilities on KNOT Offshore and Lincoln Educational 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 Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Lincoln Educational.
Diversification Opportunities for KNOT Offshore and Lincoln Educational
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KNOT and Lincoln is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational 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 Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Lincoln Educational go up and down completely randomly.
Pair Corralation between KNOT Offshore and Lincoln Educational
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the Lincoln Educational. In addition to that, KNOT Offshore is 1.21 times more volatile than Lincoln Educational Services. It trades about -0.01 of its total potential returns per unit of risk. Lincoln Educational Services is currently generating about 0.1 per unit of volatility. If you would invest 546.00 in Lincoln Educational Services on September 3, 2024 and sell it today you would earn a total of 1,097 from holding Lincoln Educational Services or generate 200.92% 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. Lincoln Educational Services
Performance |
| Timeline |
| KNOT Offshore Partners |
| Lincoln Educational |
KNOT Offshore and Lincoln Educational Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Lincoln Educational
The main advantage of trading using opposite KNOT Offshore and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational's long position.| KNOT Offshore vs. International Seaways | KNOT Offshore vs. Scorpio Tankers | KNOT Offshore vs. Dorian LPG | KNOT Offshore vs. Teekay Tankers |
| Lincoln Educational vs. Vasta Platform | Lincoln Educational vs. Laureate Education | Lincoln Educational vs. American Public Education | Lincoln Educational vs. Adtalem Global Education |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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