Correlation Between Plexus Corp and Knife River
Can any of the company-specific risk be diversified away by investing in both Plexus Corp and Knife River 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 Plexus Corp and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plexus Corp and Knife River, you can compare the effects of market volatilities on Plexus Corp and Knife River 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 Plexus Corp with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plexus Corp and Knife River.
Diversification Opportunities for Plexus Corp and Knife River
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plexus and Knife is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Plexus Corp and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and Plexus Corp 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 Plexus Corp are associated (or correlated) with Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Plexus Corp i.e., Plexus Corp and Knife River go up and down completely randomly.
Pair Corralation between Plexus Corp and Knife River
Given the investment horizon of 90 days Plexus Corp is expected to generate 1.34 times less return on investment than Knife River. But when comparing it to its historical volatility, Plexus Corp is 1.3 times less risky than Knife River. It trades about 0.34 of its potential returns per unit of risk. Knife River is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 9,538 in Knife River on September 14, 2024 and sell it today you would earn a total of 1,035 from holding Knife River or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plexus Corp vs. Knife River
Performance |
| Timeline |
| Plexus Corp |
| Knife River |
Plexus Corp and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plexus Corp and Knife River
The main advantage of trading using opposite Plexus Corp and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plexus Corp position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| Plexus Corp vs. Celestica | Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Jabil Circuit |
| Knife River vs. Sphere Entertainment Co | Knife River vs. Weibo Corp | Knife River vs. Radcom | Knife River vs. Plexus Corp |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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