Correlation Between Knowles Cor and Altigen Communications

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

By analyzing existing cross correlation between Knowles Cor and Altigen Communications, you can compare the effects of market volatilities on Knowles Cor and Altigen Communications 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 Knowles Cor with a short position of Altigen Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Altigen Communications.

Diversification Opportunities for Knowles Cor and Altigen Communications

0.0

Correlation Coefficient

Knowles Cor  Altigen Communications

Pay attention - limited upside

The 3 months correlation between Knowles and Altigen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Altigen Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altigen Communications and Knowles Cor 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 Knowles Cor are associated (or correlated) with Altigen Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altigen Communications has no effect on the direction of Knowles Cor i.e., Knowles Cor and Altigen Communications go up and down completely randomly.

Pair Corralation between Knowles Cor and Altigen Communications

If you would invest (100.00) in Altigen Communications on December 19, 2024 and sell it today you would earn a total of  100.00  from holding Altigen Communications or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Knowles Cor  vs.  Altigen Communications

Knowles Cor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Knowles Cor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Altigen Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Altigen Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Altigen Communications is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Knowles Cor and Altigen Communications

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

The idea behind Knowles Cor and Altigen Communications 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.