Correlation Between Knowles Cor and EPlus

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

By analyzing existing cross correlation between Knowles Cor and ePlus inc, you can compare the effects of market volatilities on Knowles Cor and EPlus 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 EPlus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and EPlus.

Diversification Opportunities for Knowles Cor and EPlus

0.12

Correlation Coefficient

Knowles Cor  EPlus

Average diversification

The 3 months correlation between Knowles and EPlus is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus 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 EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of Knowles Cor i.e., Knowles Cor and EPlus go up and down completely randomly.

Pair Corralation between Knowles Cor and EPlus

Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 1.15 times more return on investment than EPlus. However, Knowles Cor is 1.15 times more volatile than ePlus inc. It trades about 0.16 of its potential returns per unit of risk. ePlus inc is currently generating about -0.02 per unit of risk. If you would invest  1,632  in Knowles Cor on May 4, 2025 and sell it today you would earn a total of  353.00  from holding Knowles Cor or generate 21.63% return on investment over 90 days.

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

Knowles Cor  vs.  ePlus inc

Knowles Cor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Knowles Cor are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Knowles Cor displayed solid returns over the last few months and may actually be approaching a breakup point.

ePlus inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Knowles Cor and EPlus

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

The idea behind Knowles Cor and ePlus 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.