Correlation Between Knight Transportation and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Knight Transportation and Hong Kong 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 Knight Transportation and Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Transportation and Hong Kong Pharma, you can compare the effects of market volatilities on Knight Transportation and Hong Kong 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 Knight Transportation with a short position of Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Transportation and Hong Kong.
Diversification Opportunities for Knight Transportation and Hong Kong
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Knight and Hong is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Knight Transportation and Hong Kong Pharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Pharma and Knight Transportation 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 Knight Transportation are associated (or correlated) with Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Pharma has no effect on the direction of Knight Transportation i.e., Knight Transportation and Hong Kong go up and down completely randomly.
Pair Corralation between Knight Transportation and Hong Kong
Considering the 90-day investment horizon Knight Transportation is expected to generate 0.33 times more return on investment than Hong Kong. However, Knight Transportation is 3.07 times less risky than Hong Kong. It trades about 0.12 of its potential returns per unit of risk. Hong Kong Pharma is currently generating about -0.07 per unit of risk. If you would invest 4,150 in Knight Transportation on September 10, 2025 and sell it today you would earn a total of 828.00 from holding Knight Transportation or generate 19.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Transportation vs. Hong Kong Pharma
Performance |
| Timeline |
| Knight Transportation |
| Hong Kong Pharma |
Knight Transportation and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Transportation and Hong Kong
The main advantage of trading using opposite Knight Transportation and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Transportation position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Knight Transportation vs. TFI International | Knight Transportation vs. Saia Inc | Knight Transportation vs. Federal Signal | Knight Transportation vs. Simpson Manufacturing |
| Hong Kong vs. Lakeside Holding Limited | Hong Kong vs. PS International Group | Hong Kong vs. Freightos Limited Ordinary | Hong Kong vs. Universal Security Instruments |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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