Correlation Between KIMBALL ELECTRONICS and SEALED AIR
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and SEALED AIR 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 SEALED AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and SEALED AIR , you can compare the effects of market volatilities on KIMBALL ELECTRONICS and SEALED AIR 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 SEALED AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and SEALED AIR.
Diversification Opportunities for KIMBALL ELECTRONICS and SEALED AIR
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KIMBALL and SEALED is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and SEALED AIR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALED AIR 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 SEALED AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALED AIR has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and SEALED AIR go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and SEALED AIR
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.18 times more return on investment than SEALED AIR. However, KIMBALL ELECTRONICS is 1.18 times more volatile than SEALED AIR . It trades about -0.02 of its potential returns per unit of risk. SEALED AIR is currently generating about -0.05 per unit of risk. If you would invest 1,770 in KIMBALL ELECTRONICS on November 30, 2024 and sell it today you would lose (30.00) from holding KIMBALL ELECTRONICS or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. SEALED AIR
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| SEALED AIR |
KIMBALL ELECTRONICS and SEALED AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and SEALED AIR
The main advantage of trading using opposite KIMBALL ELECTRONICS and SEALED AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, SEALED AIR 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 SEALED AIR will offset losses from the drop in SEALED AIR's long position.The idea behind KIMBALL ELECTRONICS and SEALED AIR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| SEALED AIR vs. Rocket Internet SE | SEALED AIR vs. GMO INTERNET | SEALED AIR vs. China Modern Dairy | SEALED AIR vs. Chengdu PUTIAN Telecommunications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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