Correlation Between SHP ETF and Knights Of

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

By analyzing existing cross correlation between SHP ETF Trust and Knights Of Columbus, you can compare the effects of market volatilities on SHP ETF and Knights Of 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 SHP ETF with a short position of Knights Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of SHP ETF and Knights Of.

Diversification Opportunities for SHP ETF and Knights Of

0.39

Correlation Coefficient

SHP ETF  Knights Of

Weak diversification

The 24 months correlation between SHP and Knights is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding SHP ETF Trust and Knights Of Columbus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knights Of Columbus and SHP ETF 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 SHP ETF Trust are associated (or correlated) with Knights Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knights Of Columbus has no effect on the direction of SHP ETF i.e., SHP ETF and Knights Of go up and down completely randomly.

Pair Corralation between SHP ETF and Knights Of

Given the investment horizon of 90 days SHP ETF Trust is expected to under-perform the Knights Of. In addition to that, SHP ETF is 1.98 times more volatile than Knights Of Columbus. It trades about -0.22 of its total potential returns per unit of risk. Knights Of Columbus is currently generating about -0.18 per unit of volatility. If you would invest  860.00  in Knights Of Columbus on February 2, 2024 and sell it today you would lose (13.00) from holding Knights Of Columbus or give up 1.51% of portfolio value over 90 days.

Time Period	24 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SHP ETF Trust  vs.  Knights Of Columbus

SHP ETF Trust

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SHP ETF Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SHP ETF is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Knights Of Columbus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Knights Of Columbus has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Knights Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SHP ETF and Knights Of

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

The idea behind SHP ETF Trust and Knights Of Columbus 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.