Correlation Between Knight Transportation and Heritage Insurance
Can any of the company-specific risk be diversified away by investing in both Knight Transportation and Heritage Insurance 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 Heritage Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Transportation and Heritage Insurance Hldgs, you can compare the effects of market volatilities on Knight Transportation and Heritage Insurance 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 Heritage Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Transportation and Heritage Insurance.
Diversification Opportunities for Knight Transportation and Heritage Insurance
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Knight and Heritage is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Knight Transportation and Heritage Insurance Hldgs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heritage Insurance Hldgs 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 Heritage Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heritage Insurance Hldgs has no effect on the direction of Knight Transportation i.e., Knight Transportation and Heritage Insurance go up and down completely randomly.
Pair Corralation between Knight Transportation and Heritage Insurance
Considering the 90-day investment horizon Knight Transportation is expected to generate 0.61 times more return on investment than Heritage Insurance. However, Knight Transportation is 1.63 times less risky than Heritage Insurance. It trades about 0.12 of its potential returns per unit of risk. Heritage Insurance Hldgs is currently generating about 0.06 per unit of risk. If you would invest 4,261 in Knight Transportation on September 8, 2025 and sell it today you would earn a total of 869.00 from holding Knight Transportation or generate 20.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Transportation vs. Heritage Insurance Hldgs
Performance |
| Timeline |
| Knight Transportation |
| Heritage Insurance Hldgs |
Knight Transportation and Heritage Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Transportation and Heritage Insurance
The main advantage of trading using opposite Knight Transportation and Heritage Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Transportation position performs unexpectedly, Heritage Insurance 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 Heritage Insurance will offset losses from the drop in Heritage Insurance's long position.| Knight Transportation vs. CarsalesCom Ltd ADR | Knight Transportation vs. Gaming Realms plc | Knight Transportation vs. Boyd Gaming | Knight Transportation vs. ToysRUs ANZ Limited |
| Heritage Insurance vs. Evolution Mining Limited | Heritage Insurance vs. Aerofoam Metals | Heritage Insurance vs. Catalyst Metals Limited | Heritage Insurance vs. Tsingtao Brewery |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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