Correlation Between KIMBALL ELECTRONICS and STMICROELECTRONICS
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and STMICROELECTRONICS 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 STMICROELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and STMICROELECTRONICS, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and STMICROELECTRONICS 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 STMICROELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and STMICROELECTRONICS.
Diversification Opportunities for KIMBALL ELECTRONICS and STMICROELECTRONICS
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KIMBALL and STMICROELECTRONICS is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and STMICROELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STMICROELECTRONICS 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 STMICROELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STMICROELECTRONICS has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and STMICROELECTRONICS go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and STMICROELECTRONICS
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.08 times more return on investment than STMICROELECTRONICS. However, KIMBALL ELECTRONICS is 1.08 times more volatile than STMICROELECTRONICS. It trades about 0.0 of its potential returns per unit of risk. STMICROELECTRONICS is currently generating about -0.02 per unit of risk. If you would invest 2,080 in KIMBALL ELECTRONICS on September 23, 2024 and sell it today you would lose (350.00) from holding KIMBALL ELECTRONICS or give up 16.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. STMICROELECTRONICS
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| STMICROELECTRONICS |
KIMBALL ELECTRONICS and STMICROELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and STMICROELECTRONICS
The main advantage of trading using opposite KIMBALL ELECTRONICS and STMICROELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, STMICROELECTRONICS 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 STMICROELECTRONICS will offset losses from the drop in STMICROELECTRONICS's long position.| KIMBALL ELECTRONICS vs. MeVis Medical Solutions | KIMBALL ELECTRONICS vs. Sumitomo Mitsui Construction | KIMBALL ELECTRONICS vs. DAIRY FARM INTL | KIMBALL ELECTRONICS vs. HYDROFARM HLD GRP |
| STMICROELECTRONICS vs. 24SEVENOFFICE GROUP AB | STMICROELECTRONICS vs. Check Point Software | STMICROELECTRONICS vs. Casio Computer CoLtd | STMICROELECTRONICS vs. AECOM TECHNOLOGY |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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