Correlation Between TG Venture and KNOT Offshore

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

By analyzing existing cross correlation between TG Venture Acquisition and KNOT Offshore Partners, you can compare the effects of market volatilities on TG Venture and KNOT Offshore 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 TG Venture with a short position of KNOT Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of TG Venture and KNOT Offshore.

Diversification Opportunities for TG Venture and KNOT Offshore

0.28

Correlation Coefficient

TG Venture  KNOT Offshore

Modest diversification

The 3 months correlation between TGVCU and KNOT is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding TG Venture Acquisition and KNOT Offshore Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNOT Offshore Partners and TG Venture 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 TG Venture Acquisition are associated (or correlated) with KNOT Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNOT Offshore Partners has no effect on the direction of TG Venture i.e., TG Venture and KNOT Offshore go up and down completely randomly.

Pair Corralation between TG Venture and KNOT Offshore

If you would invest  972.00  in TG Venture Acquisition on September 19, 2024 and sell it today you would earn a total of  0.00  from holding TG Venture Acquisition or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

TG Venture Acquisition  vs.  KNOT Offshore Partners

TG Venture Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TG Venture Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, TG Venture is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

KNOT Offshore Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KNOT Offshore Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with TG Venture and KNOT Offshore

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

The idea behind TG Venture Acquisition and KNOT Offshore Partners 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.