Correlation Between Emerson Radio and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both Emerson Radio and KNOT Offshore 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 Emerson Radio and KNOT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerson Radio and KNOT Offshore Partners, you can compare the effects of market volatilities on Emerson Radio and KNOT Offshore 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 Emerson Radio with a short position of KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerson Radio and KNOT Offshore.
Diversification Opportunities for Emerson Radio and KNOT Offshore
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Emerson and KNOT is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Emerson Radio and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners and Emerson Radio 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 Emerson Radio are associated (or correlated) with KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Emerson Radio i.e., Emerson Radio and KNOT Offshore go up and down completely randomly.
Pair Corralation between Emerson Radio and KNOT Offshore
Considering the 90-day investment horizon Emerson Radio is expected to under-perform the KNOT Offshore. In addition to that, Emerson Radio is 1.92 times more volatile than KNOT Offshore Partners. It trades about -0.31 of its total potential returns per unit of risk. KNOT Offshore Partners is currently generating about 0.02 per unit of volatility. If you would invest 587.00 in KNOT Offshore Partners on September 4, 2024 and sell it today you would earn a total of 2.00 from holding KNOT Offshore Partners or generate 0.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerson Radio vs. KNOT Offshore Partners
Performance |
| Timeline |
| Emerson Radio |
| KNOT Offshore Partners |
Emerson Radio and KNOT Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerson Radio and KNOT Offshore
The main advantage of trading using opposite Emerson Radio and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerson Radio position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore's long position.| Emerson Radio vs. VOXX International | Emerson Radio vs. LG Display Co | Emerson Radio vs. Vizio Holding Corp | Emerson Radio vs. Turtle Beach Corp |
| KNOT Offshore vs. USA Compression Partners | KNOT Offshore vs. Dynagas LNG Partners | KNOT Offshore vs. Crossamerica Partners LP | KNOT Offshore vs. Delek Logistics Partners |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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