Correlation Between TITAN MACHINERY and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both TITAN MACHINERY and KIMBALL ELECTRONICS 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 TITAN MACHINERY and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TITAN MACHINERY and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on TITAN MACHINERY and KIMBALL ELECTRONICS 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 TITAN MACHINERY with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TITAN MACHINERY and KIMBALL ELECTRONICS.
Diversification Opportunities for TITAN MACHINERY and KIMBALL ELECTRONICS
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TITAN and KIMBALL is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding TITAN MACHINERY and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and TITAN MACHINERY 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 TITAN MACHINERY are associated (or correlated) with KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of TITAN MACHINERY i.e., TITAN MACHINERY and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between TITAN MACHINERY and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon TITAN MACHINERY is expected to generate 1.04 times less return on investment than KIMBALL ELECTRONICS. In addition to that, TITAN MACHINERY is 1.06 times more volatile than KIMBALL ELECTRONICS. It trades about 0.09 of its total potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about 0.09 per unit of volatility. If you would invest 1,590 in KIMBALL ELECTRONICS on August 28, 2024 and sell it today you would earn a total of 260.00 from holding KIMBALL ELECTRONICS or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.46% |
| Values | Daily Returns |
TITAN MACHINERY vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| TITAN MACHINERY |
| KIMBALL ELECTRONICS |
TITAN MACHINERY and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TITAN MACHINERY and KIMBALL ELECTRONICS
The main advantage of trading using opposite TITAN MACHINERY and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TITAN MACHINERY position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| TITAN MACHINERY vs. Sabra Health Care | TITAN MACHINERY vs. EPSILON HEALTHCARE LTD | TITAN MACHINERY vs. RCM TECHNOLOGIES | TITAN MACHINERY vs. AAC TECHNOLOGHLDGADR |
| KIMBALL ELECTRONICS vs. FARO Technologies | KIMBALL ELECTRONICS vs. Granite Construction | KIMBALL ELECTRONICS vs. TITAN MACHINERY | KIMBALL ELECTRONICS vs. GLG LIFE TECH |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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