Correlation Between Integral and KNOT Offshore

Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and KNOT Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Integral Ad Science and KNOT Offshore Partners, you can compare the effects of market volatilities on Integral 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 Integral with a short position of KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and KNOT Offshore.

Diversification Opportunities for Integral and KNOT Offshore

0.03

Correlation Coefficient

Integral  KNOT Offshore

Significant diversification

The 3 months correlation between Integral and KNOT is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and KNOT Offshore go up and down completely randomly.

Pair Corralation between Integral and KNOT Offshore

Considering the 90-day investment horizon Integral Ad Science is expected to under-perform the KNOT Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Integral Ad Science is 1.11 times less risky than KNOT Offshore. The stock trades about -0.17 of its potential returns per unit of risk. The KNOT Offshore Partners is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  578.00  in KNOT Offshore Partners on October 13, 2024 and sell it today you would earn a total of  31.00  from holding KNOT Offshore Partners or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Integral Ad Science  vs.  KNOT Offshore Partners

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

KNOT Offshore Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KNOT Offshore Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Integral and KNOT Offshore

The main advantage of trading using opposite Integral and KNOT Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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.

The idea behind Integral Ad Science and KNOT Offshore Partners 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.

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 Stocks Directory module to find actively traded stocks across global markets.