Correlation Between KNOT Offshore and Mapletree Logistics
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Mapletree Logistics 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 Mapletree Logistics 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 Mapletree Logistics Trust, you can compare the effects of market volatilities on KNOT Offshore and Mapletree Logistics 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 Mapletree Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Mapletree Logistics.
Diversification Opportunities for KNOT Offshore and Mapletree Logistics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KNOT and Mapletree is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Mapletree Logistics Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Logistics Trust 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 Mapletree Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Logistics Trust has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Mapletree Logistics go up and down completely randomly.
Pair Corralation between KNOT Offshore and Mapletree Logistics
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 1.39 times more return on investment than Mapletree Logistics. However, KNOT Offshore is 1.39 times more volatile than Mapletree Logistics Trust. It trades about -0.14 of its potential returns per unit of risk. Mapletree Logistics Trust is currently generating about -0.35 per unit of risk. If you would invest 618.00 in KNOT Offshore Partners on September 13, 2024 and sell it today you would lose (28.00) from holding KNOT Offshore Partners or give up 4.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Mapletree Logistics Trust
Performance |
| Timeline |
| KNOT Offshore Partners |
| Mapletree Logistics Trust |
KNOT Offshore and Mapletree Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Mapletree Logistics
The main advantage of trading using opposite KNOT Offshore and Mapletree Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Mapletree Logistics 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 Mapletree Logistics will offset losses from the drop in Mapletree Logistics' 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 |
| Mapletree Logistics vs. Biglari Holdings | Mapletree Logistics vs. The Cheesecake Factory | Mapletree Logistics vs. Dennys Corp | Mapletree Logistics vs. Playa Hotels Resorts |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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