Correlation Between Knightscope and Allegion PLC
Can any of the company-specific risk be diversified away by investing in both Knightscope and Allegion PLC 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 Knightscope and Allegion PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knightscope and Allegion PLC, you can compare the effects of market volatilities on Knightscope and Allegion PLC 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 Knightscope with a short position of Allegion PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knightscope and Allegion PLC.
Diversification Opportunities for Knightscope and Allegion PLC
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Knightscope and Allegion is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Knightscope and Allegion PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegion PLC and Knightscope 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 Knightscope are associated (or correlated) with Allegion PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegion PLC has no effect on the direction of Knightscope i.e., Knightscope and Allegion PLC go up and down completely randomly.
Pair Corralation between Knightscope and Allegion PLC
Given the investment horizon of 90 days Knightscope is expected to generate 15.55 times more return on investment than Allegion PLC. However, Knightscope is 15.55 times more volatile than Allegion PLC. It trades about 0.05 of its potential returns per unit of risk. Allegion PLC is currently generating about 0.1 per unit of risk. If you would invest 1,803 in Knightscope on August 31, 2024 and sell it today you would lose (67.00) from holding Knightscope or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knightscope vs. Allegion PLC
Performance |
| Timeline |
| Knightscope |
| Allegion PLC |
Knightscope and Allegion PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knightscope and Allegion PLC
The main advantage of trading using opposite Knightscope and Allegion PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knightscope position performs unexpectedly, Allegion PLC 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 Allegion PLC will offset losses from the drop in Allegion PLC's long position.| Knightscope vs. LogicMark | Knightscope vs. Guardforce AI Co | Knightscope vs. Bridger Aerospace Group | Knightscope vs. Iveda Solutions |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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