Correlation Between KNOT Offshore and Signature Bank
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Signature Bank 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 Signature Bank 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 Signature Bank, you can compare the effects of market volatilities on KNOT Offshore and Signature Bank 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 Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Signature Bank.
Diversification Opportunities for KNOT Offshore and Signature Bank
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNOT and Signature is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank 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 Signature Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signature Bank has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Signature Bank go up and down completely randomly.
Pair Corralation between KNOT Offshore and Signature Bank
If you would invest 1.70 in Signature Bank on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Signature Bank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Signature Bank
Performance |
| Timeline |
| KNOT Offshore Partners |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KNOT Offshore and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Signature Bank
The main advantage of trading using opposite KNOT Offshore and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Signature Bank 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 Signature Bank will offset losses from the drop in Signature Bank'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 |
| Signature Bank vs. Franklin Street Properties | Signature Bank vs. Kite Realty Group | Signature Bank vs. KNOT Offshore Partners | Signature Bank vs. WT Offshore |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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