Correlation Between Plymouth Rock and Knightscope

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

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

Diversification Opportunities for Plymouth Rock and Knightscope

-0.01

Correlation Coefficient

Plymouth Rock  Knightscope

Good diversification

The 3 months correlation between Plymouth and Knightscope is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Plymouth Rock Technologies and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope and Plymouth Rock 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 Plymouth Rock Technologies are associated (or correlated) with Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of Plymouth Rock i.e., Plymouth Rock and Knightscope go up and down completely randomly.

Pair Corralation between Plymouth Rock and Knightscope

Assuming the 90 days horizon Plymouth Rock Technologies is expected to generate 1.19 times more return on investment than Knightscope. However, Plymouth Rock is 1.19 times more volatile than Knightscope. It trades about 0.05 of its potential returns per unit of risk. Knightscope is currently generating about 0.0 per unit of risk. If you would invest  3.70  in Plymouth Rock Technologies on October 11, 2024 and sell it today you would earn a total of  0.30  from holding Plymouth Rock Technologies or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	25.86%
Values	Daily Returns

Plymouth Rock Technologies  vs.  Knightscope

Plymouth Rock Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Plymouth Rock Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Plymouth Rock is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Knightscope

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Knightscope are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental indicators, Knightscope reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plymouth Rock and Knightscope

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

The idea behind Plymouth Rock Technologies and Knightscope 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.