Correlation Between Tyson Foods and Knife River
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Knife River, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Knife River.
Diversification Opportunities for Tyson Foods and Knife River
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Knife is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Knife River go up and down completely randomly.
Pair Corralation between Tyson Foods and Knife River
Considering the 90-day investment horizon Tyson Foods is expected to generate 2.86 times less return on investment than Knife River. But when comparing it to its historical volatility, Tyson Foods is 1.58 times less risky than Knife River. It trades about 0.06 of its potential returns per unit of risk. Knife River is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,400 in Knife River on September 4, 2024 and sell it today you would earn a total of 5,838 from holding Knife River or generate 132.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Knife River
Performance |
| Timeline |
| Tyson Foods |
| Knife River |
Tyson Foods and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Knife River
The main advantage of trading using opposite Tyson Foods and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Bunge Limited | Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA |
| Knife River vs. Chemours Co | Knife River vs. Consol Energy | Knife River vs. Teleflex Incorporated | Knife River vs. Merit Medical Systems |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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