Correlation Between Know Labs and Focus Universal
Can any of the company-specific risk be diversified away by investing in both Know Labs and Focus Universal 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 Focus Universal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Know Labs and Focus Universal, you can compare the effects of market volatilities on Know Labs and Focus Universal 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 Focus Universal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Know Labs and Focus Universal.
Diversification Opportunities for Know Labs and Focus Universal
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Know and Focus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Know Labs and Focus Universal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Universal 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 Focus Universal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Universal has no effect on the direction of Know Labs i.e., Know Labs and Focus Universal go up and down completely randomly.
Pair Corralation between Know Labs and Focus Universal
Considering the 90-day investment horizon Know Labs is expected to generate 1.27 times more return on investment than Focus Universal. However, Know Labs is 1.27 times more volatile than Focus Universal. It trades about 0.11 of its potential returns per unit of risk. Focus Universal is currently generating about -0.03 per unit of risk. If you would invest 22.00 in Know Labs on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Know Labs or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Know Labs vs. Focus Universal
Performance |
| Timeline |
| Know Labs |
| Focus Universal |
Know Labs and Focus Universal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Know Labs and Focus Universal
The main advantage of trading using opposite Know Labs and Focus Universal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Know Labs position performs unexpectedly, Focus Universal 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 Focus Universal will offset losses from the drop in Focus Universal'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 |
| Focus Universal vs. ESCO Technologies | Focus Universal vs. Genasys | Focus Universal vs. Cepton Inc | Focus Universal vs. Darkpulse |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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