Correlation Between Ameriguard Security and Knightscope

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

By analyzing existing cross correlation between Ameriguard Security Services and Knightscope, you can compare the effects of market volatilities on Ameriguard Security and Knightscope 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 Ameriguard Security with a short position of Knightscope. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ameriguard Security and Knightscope.

Diversification Opportunities for Ameriguard Security and Knightscope

-0.68

Correlation Coefficient

Ameriguard Security  Knightscope

Excellent diversification

The 3 months correlation between Ameriguard and Knightscope is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ameriguard Security Services and Knightscope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knightscope and Ameriguard Security 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 Ameriguard Security Services are associated (or correlated) with Knightscope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knightscope has no effect on the direction of Ameriguard Security i.e., Ameriguard Security and Knightscope go up and down completely randomly.

Pair Corralation between Ameriguard Security and Knightscope

Given the investment horizon of 90 days Ameriguard Security is expected to generate 1.02 times less return on investment than Knightscope. In addition to that, Ameriguard Security is 2.1 times more volatile than Knightscope. It trades about 0.05 of its total potential returns per unit of risk. Knightscope is currently generating about 0.11 per unit of volatility. If you would invest  980.00  in Knightscope on September 12, 2024 and sell it today you would earn a total of  487.00  from holding Knightscope or generate 49.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Ameriguard Security Services  vs.  Knightscope

Ameriguard Security

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ameriguard Security Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Ameriguard Security unveiled solid returns over the last few months and may actually be approaching a breakup point.

Knightscope

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Knightscope are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting fundamental indicators, Knightscope reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ameriguard Security and Knightscope

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

The idea behind Ameriguard Security Services and Knightscope 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.