Correlation Between NYSE Composite and Know Labs
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Know Labs 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 NYSE Composite and Know Labs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Know Labs, you can compare the effects of market volatilities on NYSE Composite and Know Labs 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 NYSE Composite with a short position of Know Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Know Labs.
Diversification Opportunities for NYSE Composite and Know Labs
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Know is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Know Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Know Labs and NYSE Composite 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 NYSE Composite are associated (or correlated) with Know Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Know Labs has no effect on the direction of NYSE Composite i.e., NYSE Composite and Know Labs go up and down completely randomly.
Pair Corralation between NYSE Composite and Know Labs
Assuming the 90 days trading horizon NYSE Composite is expected to generate 10.74 times less return on investment than Know Labs. But when comparing it to its historical volatility, NYSE Composite is 7.49 times less risky than Know Labs. It trades about 0.13 of its potential returns per unit of risk. Know Labs is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Know Labs on August 24, 2024 and sell it today you would earn a total of 4.00 from holding Know Labs or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Know Labs
Performance |
| Timeline |
NYSE Composite and Know Labs Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Know Labs
Pair trading matchups for Know Labs
Pair Trading with NYSE Composite and Know Labs
The main advantage of trading using opposite NYSE Composite and Know Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Know Labs 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 Know Labs will offset losses from the drop in Know Labs' long position.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| Know Labs vs. Wearable Devices | Know Labs vs. Yoshiharu Global Co | Know Labs vs. bioAffinity Technologies, | Know Labs vs. Jianzhi Education Technology |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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