Correlation Between KNOT Offshore and UNITED
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By analyzing existing cross correlation between KNOT Offshore Partners and UNITED PARCEL SVC, you can compare the effects of market volatilities on KNOT Offshore and UNITED 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 UNITED. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and UNITED.
Diversification Opportunities for KNOT Offshore and UNITED
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNOT and UNITED is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and UNITED PARCEL SVC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED PARCEL SVC 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 UNITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED PARCEL SVC has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and UNITED go up and down completely randomly.
Pair Corralation between KNOT Offshore and UNITED
Given the investment horizon of 90 days KNOT Offshore Partners is expected to under-perform the UNITED. In addition to that, KNOT Offshore is 2.87 times more volatile than UNITED PARCEL SVC. It trades about -0.22 of its total potential returns per unit of risk. UNITED PARCEL SVC is currently generating about -0.04 per unit of volatility. If you would invest 11,276 in UNITED PARCEL SVC on September 2, 2024 and sell it today you would lose (189.00) from holding UNITED PARCEL SVC or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.63% |
| Values | Daily Returns |
KNOT Offshore Partners vs. UNITED PARCEL SVC
Performance |
| Timeline |
| KNOT Offshore Partners |
| UNITED PARCEL SVC |
KNOT Offshore and UNITED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and UNITED
The main advantage of trading using opposite KNOT Offshore and UNITED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, UNITED 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 UNITED will offset losses from the drop in UNITED'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 |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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