Correlation Between Knife River and Victory Sophus

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

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

Diversification Opportunities for Knife River and Victory Sophus

-0.5

Correlation Coefficient

Knife River  Victory Sophus

Very good diversification

The 3 months correlation between Knife and Victory is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Victory Sophus Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Sophus Emerging and Knife River 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 Knife River are associated (or correlated) with Victory Sophus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Sophus Emerging has no effect on the direction of Knife River i.e., Knife River and Victory Sophus go up and down completely randomly.

Pair Corralation between Knife River and Victory Sophus

Considering the 90-day investment horizon Knife River is expected to under-perform the Victory Sophus. In addition to that, Knife River is 2.69 times more volatile than Victory Sophus Emerging. It trades about -0.01 of its total potential returns per unit of risk. Victory Sophus Emerging is currently generating about 0.01 per unit of volatility. If you would invest  2,022  in Victory Sophus Emerging on March 29, 2024 and sell it today you would earn a total of  3.00  from holding Victory Sophus Emerging or generate 0.15% return on investment over 90 days.

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

Knife River  vs.  Victory Sophus Emerging

Knife River

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Knife River has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Victory Sophus Emerging

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Sophus Emerging are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Victory Sophus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Knife River and Victory Sophus

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

The idea behind Knife River and Victory Sophus Emerging 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.