Correlation Between KIMBALL ELECTRONICS and PENN NATL
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and PENN NATL 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 PENN NATL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and PENN NATL GAMING, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and PENN NATL 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 PENN NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and PENN NATL.
Diversification Opportunities for KIMBALL ELECTRONICS and PENN NATL
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KIMBALL and PENN is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and PENN NATL GAMING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN NATL GAMING 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 PENN NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN NATL GAMING has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and PENN NATL go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and PENN NATL
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the PENN NATL. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 1.09 times less risky than PENN NATL. The stock trades about -0.02 of its potential returns per unit of risk. The PENN NATL GAMING is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,564 in PENN NATL GAMING on September 2, 2024 and sell it today you would earn a total of 419.00 from holding PENN NATL GAMING or generate 26.79% 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. PENN NATL GAMING
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| PENN NATL GAMING |
KIMBALL ELECTRONICS and PENN NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and PENN NATL
The main advantage of trading using opposite KIMBALL ELECTRONICS and PENN NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, PENN NATL 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 PENN NATL will offset losses from the drop in PENN NATL's long position.| KIMBALL ELECTRONICS vs. Varta AG | KIMBALL ELECTRONICS vs. Superior Plus Corp | KIMBALL ELECTRONICS vs. Origin Agritech | KIMBALL ELECTRONICS vs. Identiv |
| PENN NATL vs. SIVERS SEMICONDUCTORS AB | PENN NATL vs. Darden Restaurants | PENN NATL vs. Reliance Steel Aluminum | PENN NATL vs. Q2M Managementberatung AG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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