Correlation Between Knowles Cor and Copart

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

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

Diversification Opportunities for Knowles Cor and Copart

-0.24

Correlation Coefficient

Knowles Cor  Copart

Very good diversification

The 3 months correlation between Knowles and Copart is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc and Knowles Cor 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 Knowles Cor are associated (or correlated) with Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of Knowles Cor i.e., Knowles Cor and Copart go up and down completely randomly.

Pair Corralation between Knowles Cor and Copart

Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 1.6 times more return on investment than Copart. However, Knowles Cor is 1.6 times more volatile than Copart Inc. It trades about 0.25 of its potential returns per unit of risk. Copart Inc is currently generating about -0.11 per unit of risk. If you would invest  1,775  in Knowles Cor on July 7, 2025 and sell it today you would earn a total of  630.00  from holding Knowles Cor or generate 35.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Knowles Cor  vs.  Copart Inc

Knowles Cor

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Knowles Cor are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Knowles Cor displayed solid returns over the last few months and may actually be approaching a breakup point.

Copart Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Copart Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Knowles Cor and Copart

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

The idea behind Knowles Cor and Copart Inc 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.