Correlation Between KIMBALL ELECTRONICS and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and Minerals Technologies, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Minerals Technologies.
Diversification Opportunities for KIMBALL ELECTRONICS and Minerals Technologies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KIMBALL and Minerals is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Minerals Technologies go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and Minerals Technologies
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.15 times more return on investment than Minerals Technologies. However, KIMBALL ELECTRONICS is 1.15 times more volatile than Minerals Technologies. It trades about 0.02 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.06 per unit of risk. If you would invest 1,810 in KIMBALL ELECTRONICS on October 30, 2024 and sell it today you would earn a total of 10.00 from holding KIMBALL ELECTRONICS or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. Minerals Technologies
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| Minerals Technologies |
KIMBALL ELECTRONICS and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and Minerals Technologies
The main advantage of trading using opposite KIMBALL ELECTRONICS and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| KIMBALL ELECTRONICS vs. Treasury Wine Estates | KIMBALL ELECTRONICS vs. NAKED WINES PLC | KIMBALL ELECTRONICS vs. GameStop Corp | KIMBALL ELECTRONICS vs. Media and Games |
| Minerals Technologies vs. Samsung Electronics Co | Minerals Technologies vs. HYATT HOTELS A | Minerals Technologies vs. UMC Electronics Co | Minerals Technologies vs. Choice Hotels International |
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 CEOs Directory module to screen CEOs from public companies around the world.
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