Correlation Between KNOT Offshore and Simon Property
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Simon Property 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 Simon Property 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 Simon Property Group, you can compare the effects of market volatilities on KNOT Offshore and Simon Property 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 Simon Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Simon Property.
Diversification Opportunities for KNOT Offshore and Simon Property
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KNOT and Simon is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Simon Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simon Property Group 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 Simon Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simon Property Group has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Simon Property go up and down completely randomly.
Pair Corralation between KNOT Offshore and Simon Property
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 2.09 times more return on investment than Simon Property. However, KNOT Offshore is 2.09 times more volatile than Simon Property Group. It trades about 0.17 of its potential returns per unit of risk. Simon Property Group is currently generating about 0.07 per unit of risk. If you would invest 548.00 in KNOT Offshore Partners on October 23, 2024 and sell it today you would earn a total of 43.00 from holding KNOT Offshore Partners or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Simon Property Group
Performance |
| Timeline |
| KNOT Offshore Partners |
| Simon Property Group |
KNOT Offshore and Simon Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Simon Property
The main advantage of trading using opposite KNOT Offshore and Simon Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Simon Property 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 Simon Property will offset losses from the drop in Simon Property'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 |
| Simon Property vs. Wheeler Real Estate | Simon Property vs. CBL Associates Properties | Simon Property vs. Saul Centers | Simon Property vs. Federal Realty Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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