Correlation Between KIMBALL ELECTRONICS and HEALTHCARE REAL
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and HEALTHCARE REAL 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 HEALTHCARE REAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and HEALTHCARE REAL A, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and HEALTHCARE REAL.
Diversification Opportunities for KIMBALL ELECTRONICS and HEALTHCARE REAL
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KIMBALL and HEALTHCARE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL A 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and HEALTHCARE REAL go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and HEALTHCARE REAL
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the HEALTHCARE REAL. In addition to that, KIMBALL ELECTRONICS is 2.01 times more volatile than HEALTHCARE REAL A. It trades about -0.03 of its total potential returns per unit of risk. HEALTHCARE REAL A is currently generating about 0.11 per unit of volatility. If you would invest 1,424 in HEALTHCARE REAL A on September 1, 2024 and sell it today you would earn a total of 296.00 from holding HEALTHCARE REAL A or generate 20.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. HEALTHCARE REAL A
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| HEALTHCARE REAL A |
KIMBALL ELECTRONICS and HEALTHCARE REAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and HEALTHCARE REAL
The main advantage of trading using opposite KIMBALL ELECTRONICS and HEALTHCARE REAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, HEALTHCARE REAL 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 HEALTHCARE REAL will offset losses from the drop in HEALTHCARE REAL's long position.| KIMBALL ELECTRONICS vs. SEALED AIR | KIMBALL ELECTRONICS vs. WIZZ AIR HLDGUNSPADR4 | KIMBALL ELECTRONICS vs. Fair Isaac Corp | KIMBALL ELECTRONICS vs. Wizz Air Holdings |
| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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