Correlation Between KIMBALL ELECTRONICS and TITAN MACHINERY
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and TITAN MACHINERY 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 KIMBALL ELECTRONICS and TITAN MACHINERY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and TITAN MACHINERY, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and TITAN MACHINERY 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 KIMBALL ELECTRONICS with a short position of TITAN MACHINERY. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and TITAN MACHINERY.
Diversification Opportunities for KIMBALL ELECTRONICS and TITAN MACHINERY
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KIMBALL and TITAN is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and TITAN MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TITAN MACHINERY and KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS are associated (or correlated) with TITAN MACHINERY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TITAN MACHINERY has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and TITAN MACHINERY go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and TITAN MACHINERY
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 0.78 times more return on investment than TITAN MACHINERY. However, KIMBALL ELECTRONICS is 1.28 times less risky than TITAN MACHINERY. It trades about -0.03 of its potential returns per unit of risk. TITAN MACHINERY is currently generating about -0.04 per unit of risk. If you would invest 2,320 in KIMBALL ELECTRONICS on August 31, 2024 and sell it today you would lose (500.00) from holding KIMBALL ELECTRONICS or give up 21.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. TITAN MACHINERY
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| TITAN MACHINERY |
KIMBALL ELECTRONICS and TITAN MACHINERY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and TITAN MACHINERY
The main advantage of trading using opposite KIMBALL ELECTRONICS and TITAN MACHINERY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, TITAN MACHINERY 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 TITAN MACHINERY will offset losses from the drop in TITAN MACHINERY's long position.| KIMBALL ELECTRONICS vs. United Airlines Holdings | KIMBALL ELECTRONICS vs. BJs Wholesale Club | KIMBALL ELECTRONICS vs. QURATE RETAIL INC | KIMBALL ELECTRONICS vs. Southwest Airlines Co |
| TITAN MACHINERY vs. Richardson Electronics | TITAN MACHINERY vs. KIMBALL ELECTRONICS | TITAN MACHINERY vs. CapitaLand Investment Limited | TITAN MACHINERY vs. WisdomTree Investments |
Check out your portfolio center.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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