Correlation Between KNOT Offshore and Zapata Computing
Can any of the company-specific risk be diversified away by investing in both KNOT Offshore and Zapata Computing 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 Zapata Computing 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 Zapata Computing Holdings, you can compare the effects of market volatilities on KNOT Offshore and Zapata Computing 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 Zapata Computing. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNOT Offshore and Zapata Computing.
Diversification Opportunities for KNOT Offshore and Zapata Computing
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNOT and Zapata is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Zapata Computing Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapata Computing Holdings 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 Zapata Computing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapata Computing Holdings has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Zapata Computing go up and down completely randomly.
Pair Corralation between KNOT Offshore and Zapata Computing
Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 0.11 times more return on investment than Zapata Computing. However, KNOT Offshore Partners is 9.43 times less risky than Zapata Computing. It trades about 0.02 of its potential returns per unit of risk. Zapata Computing Holdings is currently generating about -0.63 per unit of risk. If you would invest 593.00 in KNOT Offshore Partners on August 31, 2024 and sell it today you would earn a total of 3.00 from holding KNOT Offshore Partners or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 18.18% |
| Values | Daily Returns |
KNOT Offshore Partners vs. Zapata Computing Holdings
Performance |
| Timeline |
| KNOT Offshore Partners |
| Zapata Computing Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
KNOT Offshore and Zapata Computing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNOT Offshore and Zapata Computing
The main advantage of trading using opposite KNOT Offshore and Zapata Computing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNOT Offshore position performs unexpectedly, Zapata Computing 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 Zapata Computing will offset losses from the drop in Zapata Computing'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 |
| Zapata Computing vs. SNDL Inc | Zapata Computing vs. Upper Street Marketing | Zapata Computing vs. KNOT Offshore Partners | Zapata Computing vs. Genuine Parts Co |
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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