Correlation Between KNOT Offshore and Mcig

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

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

Diversification Opportunities for KNOT Offshore and Mcig

0.36

Correlation Coefficient

KNOT Offshore  Mcig

Weak diversification

The 3 months correlation between KNOT and Mcig is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding KNOT Offshore Partners and Mcig Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mcig Inc and KNOT Offshore 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 KNOT Offshore Partners are associated (or correlated) with Mcig. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mcig Inc has no effect on the direction of KNOT Offshore i.e., KNOT Offshore and Mcig go up and down completely randomly.

Pair Corralation between KNOT Offshore and Mcig

Given the investment horizon of 90 days KNOT Offshore Partners is expected to generate 0.15 times more return on investment than Mcig. However, KNOT Offshore Partners is 6.81 times less risky than Mcig. It trades about 0.0 of its potential returns per unit of risk. Mcig Inc is currently generating about -0.02 per unit of risk. If you would invest  551.00  in KNOT Offshore Partners on December 17, 2024 and sell it today you would lose (8.00) from holding KNOT Offshore Partners or give up 1.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

KNOT Offshore Partners  vs.  Mcig Inc

KNOT Offshore Partners

Risk-Adjusted Performance

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 relatively invariable basic indicators, KNOT Offshore is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Mcig Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mcig Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with KNOT Offshore and Mcig

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

The idea behind KNOT Offshore Partners and Mcig Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.