Correlation Between Ability and Knowles Cor

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

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

Diversification Opportunities for Ability and Knowles Cor

-0.33

Correlation Coefficient

Ability  Knowles Cor

Very good diversification

The 3 months correlation between Ability and Knowles is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ability and Knowles Cor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles Cor and Ability 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 Ability are associated (or correlated) with Knowles Cor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles Cor has no effect on the direction of Ability i.e., Ability and Knowles Cor go up and down completely randomly.

Pair Corralation between Ability and Knowles Cor

If you would invest  0.02  in Ability on January 20, 2024 and sell it today you would earn a total of  0.00  from holding Ability or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Ability  vs.  Knowles Cor

Ability

Risk-Adjusted Performance

0 of 100

Very Weak

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

Knowles Cor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Knowles Cor 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Ability and Knowles Cor

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

The idea behind Ability and Knowles Cor 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.