Correlation Between VerifyMe and Knightscope
Can any of the company-specific risk be diversified away by investing in both VerifyMe and Knightscope 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 VerifyMe and Knightscope into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VerifyMe and Knightscope, you can compare the effects of market volatilities on VerifyMe and Knightscope 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 VerifyMe with a short position of Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of VerifyMe and Knightscope.
Diversification Opportunities for VerifyMe and Knightscope
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VerifyMe and Knightscope is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding VerifyMe and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope and VerifyMe 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 VerifyMe are associated (or correlated) with Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of VerifyMe i.e., VerifyMe and Knightscope go up and down completely randomly.
Pair Corralation between VerifyMe and Knightscope
Given the investment horizon of 90 days VerifyMe is expected to under-perform the Knightscope. But the stock apears to be less risky and, when comparing its historical volatility, VerifyMe is 1.5 times less risky than Knightscope. The stock trades about -0.19 of its potential returns per unit of risk. The Knightscope is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,803 in Knightscope on August 31, 2024 and sell it today you would lose (67.00) from holding Knightscope or give up 3.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VerifyMe vs. Knightscope
Performance |
| Timeline |
| VerifyMe |
| Knightscope |
VerifyMe and Knightscope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VerifyMe and Knightscope
The main advantage of trading using opposite VerifyMe and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VerifyMe position performs unexpectedly, Knightscope 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 Knightscope will offset losses from the drop in Knightscope's long position.The idea behind VerifyMe and Knightscope pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Knightscope vs. LogicMark | Knightscope vs. Guardforce AI Co | Knightscope vs. Bridger Aerospace Group | Knightscope vs. Iveda Solutions |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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