Correlation Between Know Labs and Badger Meter
Can any of the company-specific risk be diversified away by investing in both Know Labs and Badger Meter 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 Know Labs and Badger Meter into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Know Labs and Badger Meter, you can compare the effects of market volatilities on Know Labs and Badger Meter 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 Know Labs with a short position of Badger Meter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Know Labs and Badger Meter.
Diversification Opportunities for Know Labs and Badger Meter
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Know and Badger is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Know Labs and Badger Meter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Badger Meter and Know Labs 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 Know Labs are associated (or correlated) with Badger Meter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Badger Meter has no effect on the direction of Know Labs i.e., Know Labs and Badger Meter go up and down completely randomly.
Pair Corralation between Know Labs and Badger Meter
Considering the 90-day investment horizon Know Labs is expected to under-perform the Badger Meter. In addition to that, Know Labs is 12.71 times more volatile than Badger Meter. It trades about -0.04 of its total potential returns per unit of risk. Badger Meter is currently generating about -0.11 per unit of volatility. If you would invest 21,810 in Badger Meter on December 19, 2024 and sell it today you would lose (2,112) from holding Badger Meter or give up 9.68% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Know Labs vs. Badger Meter
Performance |
Timeline |
Know Labs |
Badger Meter |
Know Labs and Badger Meter Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Know Labs and Badger Meter
The main advantage of trading using opposite Know Labs and Badger Meter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Know Labs position performs unexpectedly, Badger Meter 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 Badger Meter will offset losses from the drop in Badger Meter's long position.Know Labs vs. Wearable Devices | Know Labs vs. Yoshiharu Global Co | Know Labs vs. bioAffinity Technologies, | Know Labs vs. Jianzhi Education Technology |
Badger Meter vs. ESCO Technologies | Badger Meter vs. Novanta | Badger Meter vs. Sensata Technologies Holding | Badger Meter vs. Fortive Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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