Correlation Between KIMBALL ELECTRONICS and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and SWISS WATER 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 SWISS WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and SWISS WATER.
Diversification Opportunities for KIMBALL ELECTRONICS and SWISS WATER
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KIMBALL and SWISS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and SWISS WATER go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and SWISS WATER
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the SWISS WATER. In addition to that, KIMBALL ELECTRONICS is 1.05 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about -0.03 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.04 per unit of volatility. If you would invest 242.00 in SWISS WATER DECAFFCOFFEE on September 12, 2024 and sell it today you would earn a total of 20.00 from holding SWISS WATER DECAFFCOFFEE or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| SWISS WATER DECAFFCOFFEE |
KIMBALL ELECTRONICS and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and SWISS WATER
The main advantage of trading using opposite KIMBALL ELECTRONICS and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| KIMBALL ELECTRONICS vs. Superior Plus Corp | KIMBALL ELECTRONICS vs. SIVERS SEMICONDUCTORS AB | KIMBALL ELECTRONICS vs. Norsk Hydro ASA | KIMBALL ELECTRONICS vs. Reliance Steel Aluminum |
| SWISS WATER vs. Chongqing Machinery Electric | SWISS WATER vs. Insteel Industries | SWISS WATER vs. RELIANCE STEEL AL | SWISS WATER vs. Hitachi Construction Machinery |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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