Correlation Between Knife River and Vanguard Explorer
Can any of the company-specific risk be diversified away by investing in both Knife River and Vanguard Explorer 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 Knife River and Vanguard Explorer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Vanguard Explorer Fund, you can compare the effects of market volatilities on Knife River and Vanguard Explorer 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 Knife River with a short position of Vanguard Explorer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Vanguard Explorer.
Diversification Opportunities for Knife River and Vanguard Explorer
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Knife and Vanguard is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Vanguard Explorer Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Explorer and Knife River 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 Knife River are associated (or correlated) with Vanguard Explorer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Explorer has no effect on the direction of Knife River i.e., Knife River and Vanguard Explorer go up and down completely randomly.
Pair Corralation between Knife River and Vanguard Explorer
Considering the 90-day investment horizon Knife River is expected to generate 1.9 times more return on investment than Vanguard Explorer. However, Knife River is 1.9 times more volatile than Vanguard Explorer Fund. It trades about 0.09 of its potential returns per unit of risk. Vanguard Explorer Fund is currently generating about 0.0 per unit of risk. If you would invest 9,265 in Knife River on October 24, 2024 and sell it today you would earn a total of 1,223 from holding Knife River or generate 13.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Knife River vs. Vanguard Explorer Fund
Performance |
Timeline |
Knife River |
Vanguard Explorer |
Knife River and Vanguard Explorer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Knife River and Vanguard Explorer
The main advantage of trading using opposite Knife River and Vanguard Explorer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, Vanguard Explorer 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 Vanguard Explorer will offset losses from the drop in Vanguard Explorer's long position.Knife River vs. Gfl Environmental Holdings | Knife River vs. Insteel Industries | Knife River vs. Robix Environmental Technologies | Knife River vs. Evolution Gaming Group |
Vanguard Explorer vs. Vanguard International Growth | Vanguard Explorer vs. Vanguard Windsor Ii | Vanguard Explorer vs. Vanguard Primecap Fund | Vanguard Explorer vs. Vanguard Growth Fund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |