Correlation Between Dolphin Entertainment and KNOT Offshore
Can any of the company-specific risk be diversified away by investing in both Dolphin Entertainment and KNOT Offshore 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 Dolphin Entertainment and KNOT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolphin Entertainment and KNOT Offshore Partners, you can compare the effects of market volatilities on Dolphin Entertainment and KNOT Offshore 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 Dolphin Entertainment with a short position of KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Entertainment and KNOT Offshore.
Diversification Opportunities for Dolphin Entertainment and KNOT Offshore
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dolphin and KNOT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Entertainment and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners and Dolphin Entertainment 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 Dolphin Entertainment are associated (or correlated) with KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of Dolphin Entertainment i.e., Dolphin Entertainment and KNOT Offshore go up and down completely randomly.
Pair Corralation between Dolphin Entertainment and KNOT Offshore
Given the investment horizon of 90 days Dolphin Entertainment is expected to under-perform the KNOT Offshore. In addition to that, Dolphin Entertainment is 2.64 times more volatile than KNOT Offshore Partners. It trades about -0.05 of its total potential returns per unit of risk. KNOT Offshore Partners is currently generating about -0.05 per unit of volatility. If you would invest 656.00 in KNOT Offshore Partners on October 13, 2024 and sell it today you would lose (47.00) from holding KNOT Offshore Partners or give up 7.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Dolphin Entertainment vs. KNOT Offshore Partners
Performance |
Timeline |
Dolphin Entertainment |
KNOT Offshore Partners |
Dolphin Entertainment and KNOT Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dolphin Entertainment and KNOT Offshore
The main advantage of trading using opposite Dolphin Entertainment and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Entertainment position performs unexpectedly, KNOT Offshore 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 KNOT Offshore will offset losses from the drop in KNOT Offshore's long position.Dolphin Entertainment vs. Hall of Fame | Dolphin Entertainment vs. Wisekey International Holding | Dolphin Entertainment vs. Oriental Culture Holding |
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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