Correlation Between Knightscope and ConnectM Technology

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

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

Diversification Opportunities for Knightscope and ConnectM Technology

-0.75

Correlation Coefficient

Knightscope  ConnectM Technology

Pay attention - limited upside

The 3 months correlation between Knightscope and ConnectM is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Knightscope and ConnectM Technology Solutions, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectM Technology and Knightscope 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 Knightscope are associated (or correlated) with ConnectM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectM Technology has no effect on the direction of Knightscope i.e., Knightscope and ConnectM Technology go up and down completely randomly.

Pair Corralation between Knightscope and ConnectM Technology

Given the investment horizon of 90 days Knightscope is expected to generate 1.81 times more return on investment than ConnectM Technology. However, Knightscope is 1.81 times more volatile than ConnectM Technology Solutions,. It trades about 0.1 of its potential returns per unit of risk. ConnectM Technology Solutions, is currently generating about 0.06 per unit of risk. If you would invest  1,280  in Knightscope on August 30, 2024 and sell it today you would earn a total of  456.00  from holding Knightscope or generate 35.63% return on investment over 90 days.

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

Knightscope  vs.  ConnectM Technology Solutions,

Knightscope

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Knightscope are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, Knightscope reported solid returns over the last few months and may actually be approaching a breakup point.

ConnectM Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ConnectM Technology Solutions, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, ConnectM Technology displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Knightscope and ConnectM Technology

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

The idea behind Knightscope and ConnectM Technology Solutions, 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.