Correlation Between KIMBALL ELECTRONICS and North American
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and North American 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 North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and North American Construction, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and North American.
Diversification Opportunities for KIMBALL ELECTRONICS and North American
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KIMBALL and North is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and North American Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Const 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Const has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and North American go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and North American
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the North American. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 1.61 times less risky than North American. The stock trades about -0.02 of its potential returns per unit of risk. The North American Construction is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,858 in North American Construction on September 20, 2024 and sell it today you would earn a total of 142.00 from holding North American Construction or generate 7.64% 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. North American Construction
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| North American Const |
KIMBALL ELECTRONICS and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and North American
The main advantage of trading using opposite KIMBALL ELECTRONICS and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, North American 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 North American will offset losses from the drop in North American'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 |
| North American vs. SEI INVESTMENTS | North American vs. AOYAMA TRADING | North American vs. KIMBALL ELECTRONICS | North American vs. PennyMac Mortgage Investment |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |