Correlation Between Knife River and High Yield
Can any of the company-specific risk be diversified away by investing in both Knife River and High Yield 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 High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and High Yield Municipal Fund, you can compare the effects of market volatilities on Knife River and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and High Yield.
Diversification Opportunities for Knife River and High Yield
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Knife and High is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Knife River i.e., Knife River and High Yield go up and down completely randomly.
Pair Corralation between Knife River and High Yield
Considering the 90-day investment horizon Knife River is expected to under-perform the High Yield. In addition to that, Knife River is 11.82 times more volatile than High Yield Municipal Fund. It trades about -0.08 of its total potential returns per unit of risk. High Yield Municipal Fund is currently generating about -0.11 per unit of volatility. If you would invest 853.00 in High Yield Municipal Fund on May 1, 2025 and sell it today you would lose (12.00) from holding High Yield Municipal Fund or give up 1.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. High Yield Municipal Fund
Performance |
| Timeline |
| Knife River |
| High Yield Municipal |
Knife River and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and High Yield
The main advantage of trading using opposite Knife River and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Knife River vs. Minerals Technologies | Knife River vs. NETGEAR | Knife River vs. Arrow Electronics | Knife River vs. Asure Software |
| High Yield vs. High Yield Fund Investor | High Yield vs. Intermediate Term Tax Free Bond | High Yield vs. California High Yield Municipal | High Yield vs. T Rowe Price |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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