Correlation Between KIMBALL ELECTRONICS and METHODE ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and METHODE ELECTRONICS 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 METHODE ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and METHODE ELECTRONICS, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and METHODE ELECTRONICS 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 METHODE ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and METHODE ELECTRONICS.
Diversification Opportunities for KIMBALL ELECTRONICS and METHODE ELECTRONICS
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between KIMBALL and METHODE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and METHODE ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on METHODE ELECTRONICS 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 METHODE ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of METHODE ELECTRONICS has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and METHODE ELECTRONICS go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and METHODE ELECTRONICS
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 0.62 times more return on investment than METHODE ELECTRONICS. However, KIMBALL ELECTRONICS is 1.61 times less risky than METHODE ELECTRONICS. It trades about 0.0 of its potential returns per unit of risk. METHODE ELECTRONICS is currently generating about -0.05 per unit of risk. If you would invest 2,100 in KIMBALL ELECTRONICS on August 28, 2024 and sell it today you would lose (250.00) from holding KIMBALL ELECTRONICS or give up 11.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. METHODE ELECTRONICS
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| METHODE ELECTRONICS |
KIMBALL ELECTRONICS and METHODE ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and METHODE ELECTRONICS
The main advantage of trading using opposite KIMBALL ELECTRONICS and METHODE ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, METHODE ELECTRONICS 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 METHODE ELECTRONICS will offset losses from the drop in METHODE ELECTRONICS's long position.| KIMBALL ELECTRONICS vs. FARO Technologies | KIMBALL ELECTRONICS vs. Granite Construction | KIMBALL ELECTRONICS vs. TITAN MACHINERY | KIMBALL ELECTRONICS vs. GLG LIFE TECH |
| METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Apple Inc | METHODE ELECTRONICS vs. Microsoft | METHODE ELECTRONICS vs. Microsoft |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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