Correlation Between KIMBALL ELECTRONICS and REGAL HOTEL
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and REGAL HOTEL 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 REGAL HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and REGAL HOTEL INTL, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and REGAL HOTEL 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 REGAL HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and REGAL HOTEL.
Diversification Opportunities for KIMBALL ELECTRONICS and REGAL HOTEL
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KIMBALL and REGAL is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and REGAL HOTEL INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL HOTEL INTL 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 REGAL HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL HOTEL INTL has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and REGAL HOTEL go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and REGAL HOTEL
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 2.23 times more return on investment than REGAL HOTEL. However, KIMBALL ELECTRONICS is 2.23 times more volatile than REGAL HOTEL INTL. It trades about 0.13 of its potential returns per unit of risk. REGAL HOTEL INTL is currently generating about 0.01 per unit of risk. If you would invest 1,670 in KIMBALL ELECTRONICS on August 27, 2024 and sell it today you would earn a total of 180.00 from holding KIMBALL ELECTRONICS or generate 10.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. REGAL HOTEL INTL
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| REGAL HOTEL INTL |
KIMBALL ELECTRONICS and REGAL HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and REGAL HOTEL
The main advantage of trading using opposite KIMBALL ELECTRONICS and REGAL HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, REGAL HOTEL 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 REGAL HOTEL will offset losses from the drop in REGAL HOTEL's long position.| KIMBALL ELECTRONICS vs. Pure Storage | KIMBALL ELECTRONICS vs. Automatic Data Processing | KIMBALL ELECTRONICS vs. PUBLIC STORAGE PRFO | KIMBALL ELECTRONICS vs. Zijin Mining Group |
| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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