Correlation Between KIMBALL ELECTRONICS and ARROW ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and ARROW ELECTRONICS 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 ARROW ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and ARROW ELECTRONICS, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and ARROW ELECTRONICS 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 ARROW ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and ARROW ELECTRONICS.
Diversification Opportunities for KIMBALL ELECTRONICS and ARROW ELECTRONICS
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KIMBALL and ARROW is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and ARROW ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARROW ELECTRONICS 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 ARROW ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARROW ELECTRONICS has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and ARROW ELECTRONICS go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and ARROW ELECTRONICS
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.26 times more return on investment than ARROW ELECTRONICS. However, KIMBALL ELECTRONICS is 1.26 times more volatile than ARROW ELECTRONICS. It trades about 0.08 of its potential returns per unit of risk. ARROW ELECTRONICS is currently generating about -0.02 per unit of risk. If you would invest 1,590 in KIMBALL ELECTRONICS on October 24, 2024 and sell it today you would earn a total of 240.00 from holding KIMBALL ELECTRONICS or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. ARROW ELECTRONICS
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| ARROW ELECTRONICS |
KIMBALL ELECTRONICS and ARROW ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and ARROW ELECTRONICS
The main advantage of trading using opposite KIMBALL ELECTRONICS and ARROW ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, ARROW ELECTRONICS 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 ARROW ELECTRONICS will offset losses from the drop in ARROW ELECTRONICS's long position.| KIMBALL ELECTRONICS vs. CVR Medical Corp | KIMBALL ELECTRONICS vs. Solstad Offshore ASA | KIMBALL ELECTRONICS vs. Ross Stores | KIMBALL ELECTRONICS vs. WT OFFSHORE |
| ARROW ELECTRONICS vs. Apple Inc | ARROW ELECTRONICS vs. Apple Inc | ARROW ELECTRONICS vs. Apple Inc | ARROW ELECTRONICS vs. Apple Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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