Correlation Between Knightscope and Global Digital
Can any of the company-specific risk be diversified away by investing in both Knightscope and Global Digital 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 Global Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knightscope and Global Digital Soltn, you can compare the effects of market volatilities on Knightscope and Global Digital 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 Global Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knightscope and Global Digital.
Diversification Opportunities for Knightscope and Global Digital
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knightscope and Global is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Knightscope and Global Digital Soltn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Digital Soltn 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 Global Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Digital Soltn has no effect on the direction of Knightscope i.e., Knightscope and Global Digital go up and down completely randomly.
Pair Corralation between Knightscope and Global Digital
Given the investment horizon of 90 days Knightscope is expected to generate 75.59 times less return on investment than Global Digital. But when comparing it to its historical volatility, Knightscope is 10.53 times less risky than Global Digital. It trades about 0.01 of its potential returns per unit of risk. Global Digital Soltn is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.45 in Global Digital Soltn on September 2, 2024 and sell it today you would lose (0.44) from holding Global Digital Soltn or give up 97.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Knightscope vs. Global Digital Soltn
Performance |
| Timeline |
| Knightscope |
| Global Digital Soltn |
Knightscope and Global Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knightscope and Global Digital
The main advantage of trading using opposite Knightscope and Global Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knightscope position performs unexpectedly, Global Digital 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 Global Digital will offset losses from the drop in Global Digital's long position.| Knightscope vs. LogicMark | Knightscope vs. Guardforce AI Co | Knightscope vs. Bridger Aerospace Group | Knightscope vs. Iveda Solutions |
| Global Digital vs. Seychelle Environmtl | Global Digital vs. Energy and Water | Global Digital vs. One World Universe | Global Digital vs. Vow ASA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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