Correlation Between Knowles Cor and Excel Corp
Can any of the company-specific risk be diversified away by investing in both Knowles Cor and Excel Corp 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 Excel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and Excel Corp, you can compare the effects of market volatilities on Knowles Cor and Excel Corp 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 Excel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and Excel Corp.
Diversification Opportunities for Knowles Cor and Excel Corp
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Knowles and Excel is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Excel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excel Corp 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 Excel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excel Corp has no effect on the direction of Knowles Cor i.e., Knowles Cor and Excel Corp go up and down completely randomly.
Pair Corralation between Knowles Cor and Excel Corp
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 0.08 times more return on investment than Excel Corp. However, Knowles Cor is 13.1 times less risky than Excel Corp. It trades about 0.18 of its potential returns per unit of risk. Excel Corp is currently generating about -0.22 per unit of risk. If you would invest 1,520 in Knowles Cor on January 26, 2024 and sell it today you would earn a total of 94.00 from holding Knowles Cor or generate 6.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Knowles Cor vs. Excel Corp
Performance |
Timeline |
Knowles Cor |
Excel Corp |
Knowles Cor and Excel Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Knowles Cor and Excel Corp
The main advantage of trading using opposite Knowles Cor and Excel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor position performs unexpectedly, Excel Corp 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 Excel Corp will offset losses from the drop in Excel Corp'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 |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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