Correlation Between KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR.
Diversification Opportunities for KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between KIMBALL and ELMOS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the ELMOS SEMICONDUCTOR. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 1.35 times less risky than ELMOS SEMICONDUCTOR. The stock trades about -0.04 of its potential returns per unit of risk. The ELMOS SEMICONDUCTOR is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 6,330 in ELMOS SEMICONDUCTOR on September 21, 2024 and sell it today you would earn a total of 580.00 from holding ELMOS SEMICONDUCTOR or generate 9.16% 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. ELMOS SEMICONDUCTOR
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| ELMOS SEMICONDUCTOR |
KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR
The main advantage of trading using opposite KIMBALL ELECTRONICS and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR'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 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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