Correlation Between Know Labs and Cepton
Can any of the company-specific risk be diversified away by investing in both Know Labs and Cepton 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 Know Labs and Cepton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Know Labs and Cepton Inc, you can compare the effects of market volatilities on Know Labs and Cepton 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 Know Labs with a short position of Cepton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Know Labs and Cepton.
Diversification Opportunities for Know Labs and Cepton
Excellent diversification
The 3 months correlation between Know and Cepton is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Know Labs and Cepton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cepton Inc and Know Labs 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 Know Labs are associated (or correlated) with Cepton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cepton Inc has no effect on the direction of Know Labs i.e., Know Labs and Cepton go up and down completely randomly.
Pair Corralation between Know Labs and Cepton
Considering the 90-day investment horizon Know Labs is expected to under-perform the Cepton. But the stock apears to be less risky and, when comparing its historical volatility, Know Labs is 2.37 times less risky than Cepton. The stock trades about -0.02 of its potential returns per unit of risk. The Cepton Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Cepton Inc on August 27, 2024 and sell it today you would lose (10.00) from holding Cepton Inc or give up 90.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 81.65% |
| Values | Daily Returns |
Know Labs vs. Cepton Inc
Performance |
| Timeline |
| Know Labs |
| Cepton Inc |
Know Labs and Cepton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Know Labs and Cepton
The main advantage of trading using opposite Know Labs and Cepton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Know Labs position performs unexpectedly, Cepton 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 Cepton will offset losses from the drop in Cepton's long position.| Know Labs vs. Wearable Devices | Know Labs vs. Yoshiharu Global Co | Know Labs vs. bioAffinity Technologies, | Know Labs vs. Jianzhi Education Technology |
| Cepton vs. Cepton Inc | Cepton vs. Thayer Ventures Acquisition | Cepton vs. Anghami Warrants | Cepton vs. Inspirato |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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