Correlation Between Know Labs and Energous

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

By analyzing existing cross correlation between Know Labs and Energous, you can compare the effects of market volatilities on Know Labs and Energous 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 Energous. Check out your portfolio center. Please also check ongoing floating volatility patterns of Know Labs and Energous.

Diversification Opportunities for Know Labs and Energous

-0.21

Correlation Coefficient

Know Labs  Energous

Very good diversification

The 3 months correlation between Know and Energous is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Know Labs and Energous in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energous 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 Energous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energous has no effect on the direction of Know Labs i.e., Know Labs and Energous go up and down completely randomly.

Pair Corralation between Know Labs and Energous

Considering the 90-day investment horizon Know Labs is expected to under-perform the Energous. But the stock apears to be less risky and, when comparing its historical volatility, Know Labs is 12.41 times less risky than Energous. The stock trades about -0.07 of its potential returns per unit of risk. The Energous is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  38.00  in Energous on October 9, 2024 and sell it today you would earn a total of  57.00  from holding Energous or generate 150.0% return on investment over 90 days.

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

Know Labs  vs.  Energous

Know Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Know Labs has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Energous

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Energous are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Energous unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Know Labs and Energous

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

The idea behind Know Labs and Energous 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.