Correlation Between Marvell Technology and Knightscope
Can any of the company-specific risk be diversified away by investing in both Marvell Technology and Knightscope 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 Marvell Technology and Knightscope into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marvell Technology Group and Knightscope, you can compare the effects of market volatilities on Marvell Technology and Knightscope 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 Marvell Technology with a short position of Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marvell Technology and Knightscope.
Diversification Opportunities for Marvell Technology and Knightscope
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Marvell and Knightscope is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Marvell Technology Group and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope and Marvell Technology 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 Marvell Technology Group are associated (or correlated) with Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of Marvell Technology i.e., Marvell Technology and Knightscope go up and down completely randomly.
Pair Corralation between Marvell Technology and Knightscope
Given the investment horizon of 90 days Marvell Technology is expected to generate 1.75 times less return on investment than Knightscope. But when comparing it to its historical volatility, Marvell Technology Group is 5.14 times less risky than Knightscope. It trades about 0.2 of its potential returns per unit of risk. Knightscope is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,586 in Knightscope on August 28, 2024 and sell it today you would earn a total of 17.00 from holding Knightscope or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marvell Technology Group vs. Knightscope
Performance |
| Timeline |
| Marvell Technology |
| Knightscope |
Marvell Technology and Knightscope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marvell Technology and Knightscope
The main advantage of trading using opposite Marvell Technology and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marvell Technology position performs unexpectedly, Knightscope 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 Knightscope will offset losses from the drop in Knightscope's long position.| Marvell Technology vs. NVIDIA | Marvell Technology vs. Intel | Marvell Technology vs. Taiwan Semiconductor Manufacturing | Marvell Technology vs. Micron Technology |
| Knightscope vs. Plexus Corp | Knightscope vs. Jabil Circuit | Knightscope vs. Sanmina | Knightscope vs. Methode Electronics |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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