Correlation Between KIMBALL ELECTRONICS and Avis Budget
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Avis Budget 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 Avis Budget into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and Avis Budget Group, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Avis Budget 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 Avis Budget. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Avis Budget.
Diversification Opportunities for KIMBALL ELECTRONICS and Avis Budget
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KIMBALL and Avis is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Avis Budget Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avis Budget Group 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 Avis Budget. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avis Budget Group has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Avis Budget go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and Avis Budget
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 0.69 times more return on investment than Avis Budget. However, KIMBALL ELECTRONICS is 1.45 times less risky than Avis Budget. It trades about -0.02 of its potential returns per unit of risk. Avis Budget Group is currently generating about -0.03 per unit of risk. If you would invest 2,260 in KIMBALL ELECTRONICS on September 2, 2024 and sell it today you would lose (450.00) from holding KIMBALL ELECTRONICS or give up 19.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. Avis Budget Group
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| Avis Budget Group |
KIMBALL ELECTRONICS and Avis Budget Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and Avis Budget
The main advantage of trading using opposite KIMBALL ELECTRONICS and Avis Budget positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Avis Budget 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 Avis Budget will offset losses from the drop in Avis Budget's long position.| KIMBALL ELECTRONICS vs. Varta AG | KIMBALL ELECTRONICS vs. Superior Plus Corp | KIMBALL ELECTRONICS vs. Origin Agritech | KIMBALL ELECTRONICS vs. Identiv |
| Avis Budget vs. BOS BETTER ONLINE | Avis Budget vs. KIMBALL ELECTRONICS | Avis Budget vs. LG Electronics | Avis Budget vs. LPKF Laser Electronics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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