Correlation Between ReTo Eco and Knife River
Can any of the company-specific risk be diversified away by investing in both ReTo Eco 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 ReTo Eco and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ReTo Eco Solutions and Knife River, you can compare the effects of market volatilities on ReTo Eco 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 ReTo Eco with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of ReTo Eco and Knife River.
Diversification Opportunities for ReTo Eco and Knife River
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ReTo and Knife is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding ReTo Eco Solutions and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and ReTo Eco 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 ReTo Eco Solutions 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 ReTo Eco i.e., ReTo Eco and Knife River go up and down completely randomly.
Pair Corralation between ReTo Eco and Knife River
Given the investment horizon of 90 days ReTo Eco Solutions is expected to under-perform the Knife River. In addition to that, ReTo Eco is 1.47 times more volatile than Knife River. It trades about -0.12 of its total potential returns per unit of risk. Knife River is currently generating about 0.15 per unit of volatility. If you would invest 9,345 in Knife River on August 26, 2024 and sell it today you would earn a total of 920.00 from holding Knife River or generate 9.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ReTo Eco Solutions vs. Knife River
Performance |
| Timeline |
| ReTo Eco Solutions |
| Knife River |
ReTo Eco and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ReTo Eco and Knife River
The main advantage of trading using opposite ReTo Eco and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ReTo Eco 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.| ReTo Eco vs. Holcim | ReTo Eco vs. Lafargeholcim Ltd ADR | ReTo Eco vs. Eagle Materials | ReTo Eco vs. The Monarch Cement |
| Knife River vs. Cemex SAB de | Knife River vs. Boise Cascad Llc | Knife River vs. CRH PLC ADR | Knife River vs. Eagle Materials |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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