Correlation Between Knight Club and Bless Asset

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

By analyzing existing cross correlation between Knight Club Capital and Bless Asset Group, you can compare the effects of market volatilities on Knight Club and Bless Asset 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 Club with a short position of Bless Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Club and Bless Asset.

Diversification Opportunities for Knight Club and Bless Asset

0.96

Correlation Coefficient

Knight Club  Bless Asset

Almost no diversification

The 3 months correlation between Knight and Bless is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Knight Club Capital and Bless Asset Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bless Asset Group and Knight Club 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 Club Capital are associated (or correlated) with Bless Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bless Asset Group has no effect on the direction of Knight Club i.e., Knight Club and Bless Asset go up and down completely randomly.

Pair Corralation between Knight Club and Bless Asset

Assuming the 90 days trading horizon Knight Club Capital is expected to generate 1.09 times more return on investment than Bless Asset. However, Knight Club is 1.09 times more volatile than Bless Asset Group. It trades about -0.02 of its potential returns per unit of risk. Bless Asset Group is currently generating about -0.1 per unit of risk. If you would invest  248.00  in Knight Club Capital on September 30, 2024 and sell it today you would lose (44.00) from holding Knight Club Capital or give up 17.74% of portfolio value over 90 days.

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

Knight Club Capital  vs.  Bless Asset Group

Knight Club Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Knight Club Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Bless Asset Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bless Asset Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Knight Club and Bless Asset

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

The idea behind Knight Club Capital and Bless Asset Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.