Correlation Between Knowles Cor and Telefonaktiebolaget
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and Telefonaktiebolaget 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 Knowles Cor and Telefonaktiebolaget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Telefonaktiebolaget LM Ericsson, you can compare the effects of market volatilities on Knowles Cor and Telefonaktiebolaget 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 Knowles Cor with a short position of Telefonaktiebolaget. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Telefonaktiebolaget.
Diversification Opportunities for Knowles Cor and Telefonaktiebolaget
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Knowles and Telefonaktiebolaget is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Telefonaktiebolaget LM Ericsso in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonaktiebolaget and Knowles Cor 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 Knowles Cor are associated (or correlated) with Telefonaktiebolaget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonaktiebolaget has no effect on the direction of Knowles Cor i.e., Knowles Cor and Telefonaktiebolaget go up and down completely randomly.
Pair Corralation between Knowles Cor and Telefonaktiebolaget
Allowing for the 90-day total investment horizon Knowles Cor is expected to under-perform the Telefonaktiebolaget. But the stock apears to be less risky and, when comparing its historical volatility, Knowles Cor is 1.08 times less risky than Telefonaktiebolaget. The stock trades about -0.06 of its potential returns per unit of risk. The Telefonaktiebolaget LM Ericsson is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 562.00 in Telefonaktiebolaget LM Ericsson on January 25, 2024 and sell it today you would lose (26.00) from holding Telefonaktiebolaget LM Ericsson or give up 4.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. Telefonaktiebolaget LM Ericsso
Performance |
| Timeline |
| Knowles Cor |
| Telefonaktiebolaget |
Knowles Cor and Telefonaktiebolaget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and Telefonaktiebolaget
The main advantage of trading using opposite Knowles Cor and Telefonaktiebolaget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, Telefonaktiebolaget 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 Telefonaktiebolaget will offset losses from the drop in Telefonaktiebolaget's long position.| Knowles Cor vs. Mynaric AG ADR | Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks |
| Telefonaktiebolaget vs. Desktop Metal | Telefonaktiebolaget vs. Fabrinet | Telefonaktiebolaget vs. Kimball Electronics | Telefonaktiebolaget vs. Knowles Cor |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |