Correlation Between KIMBALL ELECTRONICS and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and THRACE PLASTICS 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 THRACE PLASTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and THRACE PLASTICS, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and THRACE PLASTICS.
Diversification Opportunities for KIMBALL ELECTRONICS and THRACE PLASTICS
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KIMBALL and THRACE is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and THRACE PLASTICS
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to under-perform the THRACE PLASTICS. In addition to that, KIMBALL ELECTRONICS is 1.95 times more volatile than THRACE PLASTICS. It trades about -0.02 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.0 per unit of volatility. If you would invest 403.00 in THRACE PLASTICS on September 3, 2024 and sell it today you would lose (4.00) from holding THRACE PLASTICS or give up 0.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. THRACE PLASTICS
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| THRACE PLASTICS |
KIMBALL ELECTRONICS and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and THRACE PLASTICS
The main advantage of trading using opposite KIMBALL ELECTRONICS and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| KIMBALL ELECTRONICS vs. Delta Electronics Public | KIMBALL ELECTRONICS vs. YASKAWA ELEC UNSP | KIMBALL ELECTRONICS vs. VERTIV HOLCL A | KIMBALL ELECTRONICS vs. Varta AG |
| THRACE PLASTICS vs. TOTAL GABON | THRACE PLASTICS vs. Walgreens Boots Alliance | THRACE PLASTICS vs. Peak Resources Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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