Correlation Between ViaSat and Knightscope

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

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

Diversification Opportunities for ViaSat and Knightscope

-0.68

Correlation Coefficient

ViaSat  Knightscope

Excellent diversification

The 3 months correlation between ViaSat and Knightscope is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ViaSat Inc and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope and ViaSat 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 ViaSat Inc 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 ViaSat i.e., ViaSat and Knightscope go up and down completely randomly.

Pair Corralation between ViaSat and Knightscope

Given the investment horizon of 90 days ViaSat Inc is expected to generate 0.62 times more return on investment than Knightscope. However, ViaSat Inc is 1.61 times less risky than Knightscope. It trades about 0.0 of its potential returns per unit of risk. Knightscope is currently generating about -0.02 per unit of risk. If you would invest  960.00  in ViaSat Inc on October 1, 2024 and sell it today you would lose (66.00) from holding ViaSat Inc or give up 6.88% of portfolio value over 90 days.

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

ViaSat Inc  vs.  Knightscope

ViaSat Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ViaSat Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Knightscope

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Knightscope are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain fundamental indicators, Knightscope reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ViaSat and Knightscope

The main advantage of trading using opposite ViaSat and Knightscope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ViaSat 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 ViaSat Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.