Correlation Between Knightscope and Bayer AG
Can any of the company-specific risk be diversified away by investing in both Knightscope and Bayer AG 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 Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knightscope and Bayer AG, you can compare the effects of market volatilities on Knightscope and Bayer AG 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 Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knightscope and Bayer AG.
Diversification Opportunities for Knightscope and Bayer AG
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Knightscope and Bayer is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Knightscope and Bayer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG 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 Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG has no effect on the direction of Knightscope i.e., Knightscope and Bayer AG go up and down completely randomly.
Pair Corralation between Knightscope and Bayer AG
Given the investment horizon of 90 days Knightscope is expected to under-perform the Bayer AG. In addition to that, Knightscope is 3.14 times more volatile than Bayer AG. It trades about -0.27 of its total potential returns per unit of risk. Bayer AG is currently generating about 0.12 per unit of volatility. If you would invest 2,179 in Bayer AG on November 18, 2024 and sell it today you would earn a total of 83.00 from holding Bayer AG or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knightscope vs. Bayer AG
Performance |
| Timeline |
| Knightscope |
| Bayer AG |
Knightscope and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knightscope and Bayer AG
The main advantage of trading using opposite Knightscope and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knightscope position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG'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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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