Correlation Between KIMBALL ELECTRONICS and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Sunny Optical 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 Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and Sunny Optical Technology, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Sunny Optical.
Diversification Opportunities for KIMBALL ELECTRONICS and Sunny Optical
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KIMBALL and Sunny is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Sunny Optical go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and Sunny Optical
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, KIMBALL ELECTRONICS is 1.5 times less risky than Sunny Optical. The stock trades about 0.0 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 994.00 in Sunny Optical Technology on September 20, 2024 and sell it today you would lose (184.00) from holding Sunny Optical Technology or give up 18.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. Sunny Optical Technology
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| Sunny Optical Technology |
KIMBALL ELECTRONICS and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and Sunny Optical
The main advantage of trading using opposite KIMBALL ELECTRONICS and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical'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 |
| Sunny Optical vs. KIMBALL ELECTRONICS | Sunny Optical vs. TT Electronics PLC | Sunny Optical vs. ARROW ELECTRONICS | Sunny Optical vs. ULTRA CLEAN HLDGS |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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