Correlation Between KIMBALL ELECTRONICS and Volkswagen
Can any of the company-specific risk be diversified away by investing in both KIMBALL ELECTRONICS and Volkswagen 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 Volkswagen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KIMBALL ELECTRONICS and Volkswagen AG, you can compare the effects of market volatilities on KIMBALL ELECTRONICS and Volkswagen 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 Volkswagen. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIMBALL ELECTRONICS and Volkswagen.
Diversification Opportunities for KIMBALL ELECTRONICS and Volkswagen
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KIMBALL and Volkswagen is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding KIMBALL ELECTRONICS and Volkswagen AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volkswagen AG 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 Volkswagen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volkswagen AG has no effect on the direction of KIMBALL ELECTRONICS i.e., KIMBALL ELECTRONICS and Volkswagen go up and down completely randomly.
Pair Corralation between KIMBALL ELECTRONICS and Volkswagen
Assuming the 90 days horizon KIMBALL ELECTRONICS is expected to generate 1.96 times more return on investment than Volkswagen. However, KIMBALL ELECTRONICS is 1.96 times more volatile than Volkswagen AG. It trades about 0.13 of its potential returns per unit of risk. Volkswagen AG is currently generating about -0.29 per unit of risk. If you would invest 1,670 in KIMBALL ELECTRONICS on August 29, 2024 and sell it today you would earn a total of 190.00 from holding KIMBALL ELECTRONICS or generate 11.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KIMBALL ELECTRONICS vs. Volkswagen AG
Performance |
| Timeline |
| KIMBALL ELECTRONICS |
| Volkswagen AG |
KIMBALL ELECTRONICS and Volkswagen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KIMBALL ELECTRONICS and Volkswagen
The main advantage of trading using opposite KIMBALL ELECTRONICS and Volkswagen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIMBALL ELECTRONICS position performs unexpectedly, Volkswagen 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 Volkswagen will offset losses from the drop in Volkswagen's long position.| KIMBALL ELECTRONICS vs. Rogers Communications | KIMBALL ELECTRONICS vs. Verizon Communications | KIMBALL ELECTRONICS vs. PLAYSTUDIOS A DL 0001 | KIMBALL ELECTRONICS vs. Playa Hotels Resorts |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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