Correlation Between KIMBALL ELECTRONICS and PT Bank
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and PT Bank Rakyat, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and PT Bank.
Diversification Opportunities for KIMBALL ELECTRONICS and PT Bank
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KIMBALL and BYRA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and PT Bank Rakyat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Rakyat 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Rakyat has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and PT Bank go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and PT Bank
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the PT Bank. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 4.73 times less risky than PT Bank. The stock trades about -0.08 of its potential returns per unit of risk. The PT Bank Rakyat is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 24.00 in PT Bank Rakyat on November 3, 2024 and sell it today you would earn a total of 2.00 from holding PT Bank Rakyat or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. PT Bank Rakyat
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| PT Bank Rakyat |
KIMBALL ELECTRONICS and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and PT Bank
The main advantage of trading using opposite KIMBALL ELECTRONICS and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| KIMBALL ELECTRONICS vs. Suntory Beverage Food | KIMBALL ELECTRONICS vs. The Boston Beer | KIMBALL ELECTRONICS vs. Federal Agricultural Mortgage | KIMBALL ELECTRONICS vs. Hitachi Construction Machinery |
| PT Bank vs. FUYO GENERAL LEASE | PT Bank vs. VARIOUS EATERIES LS | PT Bank vs. US FOODS HOLDING | PT Bank vs. Lifeway Foods |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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