Correlation Between Knight Transportation and Rail Vision
Can any of the company-specific risk be diversified away by investing in both Knight Transportation and Rail Vision 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 Knight Transportation and Rail Vision into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Transportation and Rail Vision Ltd, you can compare the effects of market volatilities on Knight Transportation and Rail Vision 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 Knight Transportation with a short position of Rail Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Transportation and Rail Vision.
Diversification Opportunities for Knight Transportation and Rail Vision
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Knight and Rail is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Knight Transportation and Rail Vision Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rail Vision and Knight Transportation 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 Knight Transportation are associated (or correlated) with Rail Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rail Vision has no effect on the direction of Knight Transportation i.e., Knight Transportation and Rail Vision go up and down completely randomly.
Pair Corralation between Knight Transportation and Rail Vision
Considering the 90-day investment horizon Knight Transportation is expected to generate 58.02 times less return on investment than Rail Vision. But when comparing it to its historical volatility, Knight Transportation is 17.04 times less risky than Rail Vision. It trades about 0.05 of its potential returns per unit of risk. Rail Vision Ltd is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 4.54 in Rail Vision Ltd on September 19, 2024 and sell it today you would earn a total of 2.46 from holding Rail Vision Ltd or generate 54.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 73.17% |
| Values | Daily Returns |
Knight Transportation vs. Rail Vision Ltd
Performance |
| Timeline |
| Knight Transportation |
| Rail Vision |
Knight Transportation and Rail Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Transportation and Rail Vision
The main advantage of trading using opposite Knight Transportation and Rail Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Transportation position performs unexpectedly, Rail Vision 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 Rail Vision will offset losses from the drop in Rail Vision's long position.| Knight Transportation vs. Marten Transport | Knight Transportation vs. Heartland Express | Knight Transportation vs. Universal Logistics Holdings | Knight Transportation vs. Schneider National |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |