Correlation Between Kngt Clb and Knights Of

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

By analyzing existing cross correlation between Kngt Clb Sml and Knights Of Umbus, you can compare the effects of market volatilities on Kngt Clb and Knights Of 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 Kngt Clb with a short position of Knights Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kngt Clb and Knights Of.

Diversification Opportunities for Kngt Clb and Knights Of

0.82

Correlation Coefficient

Kngt Clb  Knights Of

Very poor diversification

The 3 months correlation between Kngt and Knights is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kngt Clb Sml and Knights Of Umbus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knights Of Umbus and Kngt Clb 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 Kngt Clb Sml are associated (or correlated) with Knights Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knights Of Umbus has no effect on the direction of Kngt Clb i.e., Kngt Clb and Knights Of go up and down completely randomly.

Pair Corralation between Kngt Clb and Knights Of

Assuming the 90 days horizon Kngt Clb Sml is expected to under-perform the Knights Of. In addition to that, Kngt Clb is 1.11 times more volatile than Knights Of Umbus. It trades about -0.17 of its total potential returns per unit of risk. Knights Of Umbus is currently generating about -0.11 per unit of volatility. If you would invest  2,113  in Knights Of Umbus on December 20, 2024 and sell it today you would lose (184.00) from holding Knights Of Umbus or give up 8.71% of portfolio value over 90 days.

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

Kngt Clb Sml  vs.  Knights Of Umbus

Kngt Clb Sml

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kngt Clb Sml has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Knights Of Umbus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Knights Of Umbus has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Kngt Clb and Knights Of

The main advantage of trading using opposite Kngt Clb and Knights Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kngt Clb position performs unexpectedly, Knights Of 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 Knights Of will offset losses from the drop in Knights Of's long position.

The idea behind Kngt Clb Sml and Knights Of Umbus 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.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.