Correlation Between Knightscope and JGC Corp
Can any of the company-specific risk be diversified away by investing in both Knightscope and JGC Corp 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 JGC Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knightscope and JGC Corp, you can compare the effects of market volatilities on Knightscope and JGC Corp 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 JGC Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knightscope and JGC Corp.
Diversification Opportunities for Knightscope and JGC Corp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Knightscope and JGC is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Knightscope and JGC Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JGC Corp 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 JGC Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JGC Corp has no effect on the direction of Knightscope i.e., Knightscope and JGC Corp go up and down completely randomly.
Pair Corralation between Knightscope and JGC Corp
Given the investment horizon of 90 days Knightscope is expected to generate 3.38 times more return on investment than JGC Corp. However, Knightscope is 3.38 times more volatile than JGC Corp. It trades about 0.02 of its potential returns per unit of risk. JGC Corp is currently generating about -0.03 per unit of risk. If you would invest 3,410 in Knightscope on August 28, 2024 and sell it today you would lose (1,807) from holding Knightscope or give up 52.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Knightscope vs. JGC Corp
Performance |
| Timeline |
| Knightscope |
| JGC Corp |
Knightscope and JGC Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knightscope and JGC Corp
The main advantage of trading using opposite Knightscope and JGC Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knightscope position performs unexpectedly, JGC Corp 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 JGC Corp will offset losses from the drop in JGC Corp's long position.The idea behind Knightscope and JGC Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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