Correlation Between KIMBALL ELECTRONICS and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and GOLD ROAD 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 GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and GOLD ROAD RES, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and GOLD ROAD 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 GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and GOLD ROAD.
Diversification Opportunities for KIMBALL ELECTRONICS and GOLD ROAD
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KIMBALL and GOLD is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES 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 GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and GOLD ROAD go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and GOLD ROAD
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 13.33 times less return on investment than GOLD ROAD. But when comparing it to its historical volatility, KIMBALL ELECTRONICS is 1.16 times less risky than GOLD ROAD. It trades about 0.04 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 122.00 in GOLD ROAD RES on November 3, 2024 and sell it today you would earn a total of 24.00 from holding GOLD ROAD RES or generate 19.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. GOLD ROAD RES
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| GOLD ROAD RES |
KIMBALL ELECTRONICS and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and GOLD ROAD
The main advantage of trading using opposite KIMBALL ELECTRONICS and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| KIMBALL ELECTRONICS vs. Delta Electronics Public | KIMBALL ELECTRONICS vs. YASKAWA ELEC UNSP | KIMBALL ELECTRONICS vs. Plug Power | KIMBALL ELECTRONICS vs. VERTIV HOLCL A |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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